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Thursday, February 27, 2020

Record Natural Gas Exports To Mexico-- Sur De Texas ; US-Mexico Natural Gas Update -- MAGA -- February 27, 2020

Sur de Texas: record exports point to downstream testing in Mexico. Link here:
  • record-high volumes on the Sur de Texas-Tuxpan Pipeline this month (February, 2020)
  • suggestion: testing may have already begin on the Cempoala Phase II compressor station reversal 
  • Cempoala Phase II: a key downstream infrastructure project that has promised to significantly expand Mexico's demand for US gas by the end of this quarter (1Q20);
  • February 15, 2020: Sur de Texas receipts:
    • almost one billion cf/d 
    • highest volume to date
    • corresponds with deliveries to Monte Grande have backed off, averaging just 140 million cf/d
  • however, prior to this, from the beginning of the year (2020), there has been a steady increase in transmission volumes through Monte Grande 
  • this suggests that the grid operator Cenagas could be preparing for a significant increase in gas imports from the US
  • More on the Sur de Texas-Tuxpan pipeline
    • product moves to three sites deep inside Mexico
    • crosses at Agula Dulce Hub (US/Mexico border)
    • Valley Crossing pipeline
    • Sur de Texas-Tuxpan pipeline
    • three sources of demand
      • Altamira import facility: natural gas imports seem to have decreased this year as more US natural gas flow
      • Naranjos: second connection -- pushes natural gas west into the interior, toward Salamanca
      • Monte Grande: third connection -- pushes natural gas west to Mexico City, and south to southern Mexico (via Cempoala Phase II)
    • Cempoala Phase II, a fourth potential connection / demand site: the Cempoala Phase II compressor reversal -- a project currently under construction, downstream from the Monte Grande interconnect
      • that project: will provide as much as 1.3 billion f/d of total capacity -- pushing NG further south
      • the Cempoala compressor reversal could boost US exports by as much as 700 million cf/d
  • Other developments:
    • last segment of the Wahalajara pipeline will be completed March, 2020 (next month): will increase US pipeline exports by nearly 400 million cf/d, partially displacing other non-US foreign imports
  • US pipeline exports to Mexico:
    • currently averaging 5.2 billion cf/d
    • by April, 2020: 5.7 billion cf/d
    • by August, 2020, 6.3 billion cf/d (a 20% increase over current imports)
Great map at the linked story.  

I think there are two stories here:
  • Mexico's increase demand for natural gas; and,
  • what proportion of that demand will come from the US
The first story interests me much more; the second story will take care of itself. 

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