U.S. natural gas exports to Mexico increased in 2020

natural gas exports increased in 2020

U.S. natural gas exports to Mexico have increased during the first nine months of 2020, the Energy Information Administration (EIA) informed today.

These exports are transported by pipeline and have covered the offsets in Mexican imports of liquefied natural gas (LNG) and the relatively small declines in their LNG production.

During the last five years, Mexico has been the largest destination for U.S. LNG since the surpassing of Canada in 2015.

In fact, U.S. exports have displaced other sources of Mexico’s LNG, including additional and more expensive imports from other countries.

Source: U.S. Energy Information Administration, based on Genscape, Inc. (a Wood Mackenzie company)
Note: Other represents a balancing item to reconcile monthly supply and consumption.

All of which have declined more significantly since march when the Covid-19 pandemic hit Mexico for the first time.

According to the EIA report, the industrial and electric power sectors account for all the natural gas consumption in Mexico during 2019. Being the industrial at 54% and the electric power 46% of the total.

Both of these sectors declined in their use of LNG after the measures taken by the Mexican government to contain the coronavirus spread.

In May 2020, the total consumption of LNG in Mexico fell to 7.5 billion cubic feet per day, the lowest monthly volume since December 2016.

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Natural gas, the main source for Mexico’s electric power

Nevertheless, by August 2020, Mexico’s consumption of liquified gas started to recover. It even surpassed the average of last year’s same period by 10% in the industrial sector and 5% more in the electric power industry.

According to Mexico’s National Center for Energy Control (CENACE), 61% of the country’s electricity is generated with natural gas; and year after year, these number increases, slightly displacing other sources like coal or fuel.

The EIA also reports that with the new segment of the Wahalajara pipelines, completed in June 2020, natural gas exports to Mexico rose to 5.9 billion cubic feet per day. An increase of 0.8 Bcf/d compared to the 2019 average of the same period.

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