GATHERING, the upcoming challenge in increasing production

The  president  of  Mexico  has  stated  the  importance  of  increasing  national  oil  production.  In  these  regards,  he  has  given  the  awarded  Oil  Companies  an  ultimatum  of  proving  compliance  in  three  years,  preferably by having oil production. This would be a key element to resume the bidding rounds.

On   its   part,   he   has   announced   several   plans   and   programs   to   reactivate   the   production   of   Pemex   Exploration and Production (PEP), declaring that there are sufficient conditions to invest in these activities consistently.  This  investment,  it  is  said,  may  also  allow  an  increase  in  the  recovery  of  natural  gas  and  its  liquids, thus achieving an increase in federal revenues by 2024, before the end of this administration.

However,   there   is   an   important activity   that   must   be   implemented to ensure that this investment doesn’t get abruptly interrupted by the lack of capacity to place that production in the relevant markets: gathering.


Up   to   date,   the   awarded   companies   and   PEP   have   an   expected   production that reflect forecasts impossible to handle by the current gathering infrastructure in Mexico.

To  meet  this  need,  it  will  be  necessary  to  design,  procure,  construct  and    operate    several    recollection    pipelines,    storage    tanks,    port    infrastructure  and  many  other  infrastructure  to  ensure  the  proper  delivery of oil and gas to refineries and processing centers.


Gathering   infrastructure   can   be   implemented   inside   contractual   areas,   can   cross   areas   to   serve   multiple areas or it can be designed as an infrastructure to attend and recollect oil or gas from several producers, in which case it should be operated by a third party.

To  define  the  optimal  solution,  companies  must  obtain  the  best  information  available  of  expected  production  and  forecasts.  Choosing  one  of  these  alternatives  can’t  wait  any  longer  as  awarded Oil Companies shall include this in their Development Plans.

One   more   note:   whichever   scenario   becomes   optimal   for   each   play   in   the   country,   regulatory   compliance will be key.



PEMEX’s existent gathering infrastructure is not publicly available.Private  Parties  have  yet  to  develop  their  own  gathering infrastructure. Infrastructure   outside   the   Entitlement   Areas   belongs to PEMEX Logística


There  is  no  specific  regulation  to  this  activity.  The  Hydrocarbons   Law   establishes   that   the   National   Hydrocarbons Commission (CNH) has the authority to  issue  Regulations  on  this  activity;  however,  the  exercise of this authority is still pending.  Awarded contracts address the “shared infrastructure” obligations in Annex 13 which is the only light on these regards.

In  order  to  identify  opportunities  for  gathering  infrastructure  to  include  in  the  upcoming  development plans, the research and design of proposals process starts now.


Existing infrastructure of recollection within PEMEX’s entitlements is limited and in the hands of PEP, who does not require permits granted by the CRE noris subject to open access regulation. This implies scarcity in the availability of public information: the best way to understand this infrastructure is through the analysis of each development plan approved to Pemex by CNH.

On the other hand, the oil and condensate gathering pipelines that go cross entitlement areas have a permit granted by the CRE. Through its subsidiary Pemex Logística, Pemex holds 8 permits and is in the pursuit of getting approval for regulated tariffs, new proposed terms and conditions and planification for open seasons.

In case of an infrastructure designed by an entity that can offer services to multiple contractors plus PEP, it will be subject to regulation by the Energy Regulatory Commission . This will represent regulatory obligations, regarding:

  1. Terms and Conditions approval;
  2. Regulated tariffs;
  3. Open season, and
  4. Open access obligations.

In TALANZA we support our clients in identifying the best gathering solution for their production needs by combining the existing infrastructure by region, the expected production and the regulatory compliance for each alternative.