Draft Mexican gas storage legislation expected by September

16 August 2017 14:49 Source:ICIS

Draft legislation for storage requirements for natural gas shippers and marketers will be published by Mexico’s energy ministry SENER in September, Rosanety Barrios, the head of SENER’s industrial transformation unit, said at the US-Mexico gas conference in San Antonio on 15 August.

The legislation is expected to outline formal requirements for companies to hold a minimum volume of natural gas in centralised storage facilities under the oversight of transmission system operator CENAGAS. These minimum amounts could be used to cover eventualities such as outages at pipelines or processing plants.

The cost of these storage facilities will likely be “socialised”, Barrios said, through an extra tariff paid directly to CENAGAS,

Senior figures within CENAGAS have spoken of the need to develop a storage policy for the country’s national gas supply network.

As Mexico currently does not have any domestic storage capacity, the draft proposals will likely centre on the use of the country’s two mainland LNG terminals, Altamira and Manzanillo, as future storage units.

As such, Mexican authorities are likely to use open access requirements to navigate around the existing capacity rights of Mexico’s state power utility CFE at Manzanillo, and Gas de Litoral, a subsidiary of Shell, at Altamira.

Storage facilities in the south of Texas could also be used to support Mexico’s Sistrangas grid, although it is yet to be determined whether capacity would have to be held by CENAGAS, or marketers, and how, in the latter case, their compliance with storage requirements could be proved.

Studies continue into the potential future use of salt caverns in south eastern Mexico as future underground storage facilities.

The draft legislation will be subject to the standard approval process by being posted for public comment on the website of national regulatory reform agency COFEMER for at least 20 days. Responses will then be reviewed with final proposed legislation put in front of energy regulator CRE by the end of the year. james.fowler@icis.com

By James Fowler