Mexico set for new Q4 natural gas import records despite headwinds

• Imports from west, south Texas to increase gradually
• West Texas imports have stayed up through October
• Samalayuca-Sasabe testing, commercial operations expected by Jan

HOUSTON (ICIS)–Mexico is poised for its third year of record fourth-quarter pipeline gas imports, with ICIS estimates indicating they could hover around 6 billion cubic feet (bcf)/day on average until the second half of December holiday period.

Flows from west Texas have continued to hover around 1bcf/day, keeping imports closer to 25% of pipeline capacity utilisation for the first time since the so-called Wahalajara system became fully operational in early October.

ICIS expects an incremental ramp-up through the fourth quarter if state-run utility CFE begins to deliver promised gas to its power plants connected to or downstream of Wahalajara.

WEST
West Texas imports may also increase nominally further into the fourth quarter to feed the 472 million cubic feet (mcf)/day Samalayuca-Sasabe pipeline connecting Waha gas to IEnova pipelines that hug Mexico’s northwest coast.

Samalayuca-Sasabe was built by Carso Energy, a division of Grupo Carso.
A Carso Energy spokesman said in a 27 October written statement the pipeline was physically complete and testing.

The company also said in its 23 October quarterly earnings report the pipeline was to enter commercial service in December or January.

A start during Mexico’s low demand season likely means the ramp up would be gradual, with gas likely to flow through Comanche Trail to San Isidro before entering Samalayuca to flow further west in Mexico.

EAST COAST
South Texas gas flows to Mexico have hovered close to 4bcf/day as market participants await a gradual ramp up after testing of the second phase of Cempoala’s reconfiguration nears completion at the end of October.

Gas TSO CENAGAS is completing that testing, but the complexity of the project may require more time. Once ready, it is expected to facilitate a gradual ramp up of 350mcf/day or more of south Texas gas by the end of the year.

The additional supply would be re-directed by Cempoala to the central part of the country. Cempoala is designed to re-direct up to 450mcf/day to Mexico’s central region once reconfigured, and additional flows would likely come from the Sur de Texas-Tuxpan pipeline through the Montegrande interconnect and the national Sistrangas system.

A government source previously said more interruptible import capacity was to be made available through Montegrande in the future. Sources have said compression issues near these points have been difficult to resolve and could pose an obstacle to a more dramatic ramp up.

PLANNED VERACRUZ COMPRESSION
These likely compression issues could be solved in part by two planned compression stations called Tecolutla and Lerdo upstream and downstream of Cempoala.
One source said energy ministry SENER had instructed CENAGAS to ensure both were completed and operational in 2021.

The stations were briefly mentioned during CENAGAS’ public consultation presentations, but it is unclear if they are officially part of the annual update of CENAGAS’ five-year planning document known as the Plan Quinquenal.

The yearly update of the plan is normally approved by SENER during the first half of the year, but it has not yet been released. CENAGAS officials said during the public consultation presentations they had submitted all Plan Quinquenal requirements to SENER by June and that SENER had until the end of the year to publish the final version.

The compression stations would in theory also facilitate the delivery of more gas to Mexico’s southeast where the new Cuxtal pipeline continues to gradually ramp up flows of domestically-produced gas to the downstream Mayakan system.

Latest available Mayakan flows for week 42 up to 18 October show it is not being fully used, though it briefly transported around 200mcf/day on 12 October.

Mayakan operator ENGIE is currently holding an open season for a small amount of idle system capacity as well as desired capacity.

STORM WATCH
The Mayakan system serves Mexico’s Yucatan peninsula which was hit by heavy rains from Tropical Storm Zeta.
Zeta was forming in the Gulf of Mexico on 25 October and stregthened into a hurricane on 28 October.
Zeta is currently forecast to make landfall by the end of 28 October around the US Mississippi river delta.
Claudia Espinosa