Mexico Natural Gas Production Holding Steady Amid Record Summer Imports

Mexico’s natural gas production averaged 4.30 Bcf/d in July, compared to 4.35 Bcf/d in June and 4.10 Bcf/d in July 2022.

State oil company Petróleos Mexicanos (Pemex) supplied 4.07 Bcf/d of the total, compared to 3.86 Bcf/d in the year-ago month, data from upstream regulator Comisión Nacional de Hidrocarburos (CNH) show.

Private sector operators produced about 230 MMcf/d, versus 236 MMcf/d in July 2022.

The top five producing fields, all operated by Pemex, were Quesqui (664 MMcf/d), Ixachi (337 MMcf/d), Maloob (333 MMcf/d), Akal (265 MMcf/d) and Onel (166 MMcf/d).

Associated gas tied to oil production accounted for 2.41 Bcf/d or 55.6% of total production, with the remainder coming from gas-directed wells.

Mexico’s oil production was 1.64 million b/d in July, compared to 1.62 million b/d in July 2022. Pemex production averaged 1.53 million b/d, the lowest monthly amount this year, while private sector output rose to 104,309 b/d from 93,655 b/d a year earlier. 

Since Pemex consumes a large portion of its own natural gas output, domestic production has only accounted for about 2.63 Bcf/d or 30% of Mexico’s total gas supply year-to-date through Aug. 19, according to Wood Mackenzie data.

The remaining 6.1 Bcf/d has come in the form of pipeline imports from the United States, which are up 199 MMcf/d versus the same period last year. 

Imports of U.S. pipeline gas averaged a monthly record 6.8 Bcf/d in June, according to Wood Mackenzie data.

Gas consumers in Mexico have benefited from a plunge in U.S. prices this year versus 2022.

Mexico’s state-owned power company Comisión Federal de Electricidad (CFE), the country’s primary importer and marketer of U.S. natural gas, credited lower gas prices in helping it achieve net earnings of about $3.35 billion in the second quarter, versus a $243 million loss in the same period last year. 

[Mexico Making Moves: NGI sits down with Mexico’s CNH Commissioner Moreira to discuss rising natural gas production in the country coupled with promising new natural gas discoveries, which could help to offset steadily climbing demand from increased nearshoring. Currently importing more than half of their natural gas from the U.S., Moreira also underlines the importance of creating a natural gas price index in Mexico. Tune into the Hub & Flow podcast.]

Meanwhile, multiple LNG export projects are under construction or development in Mexico, with plans to mostly re-export gas imported from the United States by pipeline. New Fortress Energy Inc. management said this month it expects to export the first cargo in October from its Altamira liquefaction hub off the coast of Tamaulipas state.

Sempra’s Energía Costa Azul Phase 1 terminal on the Pacific Coast is slated for completion in 2025.

On the upstream front, Pemex has been gradually increasing gas output in recent months while private sector production has stagnated.

Australia’s Woodside Energy Group Ltd. recently sanctioned the Trion deepwater project off the coast of Tamaulipas state. The project targets an estimated 479 million boe, including some 287 million boe of contingent natural gas resources.  First production is expected in 2028.

Pemex, for its part, saw its credit rating downgraded in July by Fitch Ratings Inc. Fitch cited concerns about Pemex’s liquidity amid mounting near-term debt maturities and the producer’s less than stellar record on environmental, social and governance metrics.

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