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Mexico faces challenge of lower gas imports in 2018

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World Pipelines,

Low US natural gas inventories and delays in new cross-border pipeline infrastructure could slow exports this year to Mexico, as reported by Reuters recently.

Very low temperatures led to a record withdrawal of 359 billion ft3 in the week ended 5 January and the second highest draw of 288 billion ft3 in week ended 19 January, depressing inventories far below the five-year average.

US gas stockpiles are currently at 2.078 trillion ft3, approximately 16% below the five-year average of 2.471 trillion ft3 for this time of year. That is the lowest amount of gas in storage for the corresponding period since 2014.

Over the past 30 days, US exports to Mexico via pipelines have averaged 3.93 billion ft3/d, lower than the 4.03 billion ft3/d during the same period a year earlier, according to data from Thomson Reuters.

Such low inventory levels will mean that operators are likely to rebuild storage, according to analysts. Mexico, which is heavily reliant upon gas imports from the US, therefore faces the prospect of supply disruptions into the ‘injection season’, typically between April and October.

“Storage operators in the US will find it difficult to fully replenish the country’s gas inventories during the 2018 gas injection season, which has the potential to adversely impact gas and LNG exports from the US during periods of peak demand,” said Abhishek Kumar, Senior Energy Analyst at Interfax Energy’s Global Gas Analytics in London.

Mexico’s need for increased imports from the US is also being hampered by the postponed opening of the cross-border Nueva Era pipeline.

The joint venture between Howard Energy Partners and Grupo Clisa is expected to transport over 0.6 billion ft3/d of gas from the Eagle Ford Shale Group in Texas to end-users in and around the northern Mexican city of Monterrey, according to Howard Energy Partners website.

Despite an original in-service target date of June 2017 however, a Howard Energy spokeswoman, Meredith Hargrove Howard, recently said that the project is only 80% complete so far; consequently the pipeline is scheduled to begin operating in 3Q18.

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US pipeline news Natural gas pipeline news Onshore pipeline news