On November 15, Cenagas’ General Director, Elvira Daniel Kabbaz, announced the development of a natural gas pipeline that will connect Sistrangas (managed by Cenagas) to the Mayakan pipeline (Engie); this project will allow gas from the Gulf of Mexico to reach the Yucatan Peninsula.
This interconnection will be the fist bidding project for transport pipelines carried out by Cenagas. In this document, Talanza Energy reviews how the open season process should take place, according to applicable regulations and expected priorities and benefits for the final users.
The functionality of the interconnection depends on the completion and full operation of the adjustments to Cempoala Compression Station, that will allow for gas to flow from the North to the South of the Gulf of Mexico, and then to de Peninsula of Yucatan. The completion of this project is expected for the first semester of 2020.
The interconnection is subject to open access not unduly discriminatory. Cenagas will have a new transport route, creating new capacity flowing from the “48’ pipeline” to the start of Mayakan. This route should go through an open season process.
Note: Conversion factors taken from Energy Information Administration. Numbers may vary due to calorific value.
Big question: Is the interconnection be sufficient for the Peninsula? When a bottleneck is solved, the major pending issue could be the supply.
This project opens opportunities for traders to reserve capacity from different sources, including gas flowing from the South of Texas – Tuxpan pipeline.
Negotiations with CFE and Pemex should come soon.
Current electrical demand is about 200 mmcfd, while the industry needs are limited to barely 10 mmpcdf.
The President of Mexico and CFE announced interest on a new CC generation plant (70 mmcfd), industrial unattended demand could reach up to 50 mmcfd just by the end of this administration. Conversion from other fuels (LPG, gasoline and diesel) will depend on prompt interest of distributors to tackle those markets.
Market participants –end users, distributors, transporters, traders, and end suppliers- should understand all possible implications of this interconnection from their respective position, to take make the most of this opportunity and to prevent risks on their ventures.
David provides solutions for business development, regulatory compliance and feasibility analysis for natural gas and liquids projects. He has experience designing strategies to identify supply, demand and funding for infrastructure projects, including a deep feasibility analysis due to a profound understanding of the regulatory environment and the regional energy balances involved on each case, both for natural gas and liquid fuels.
Daniela Flores oversees the tailoring of midstream and downstream regulatory compliance schemes. Her areas or expertise include analysis of natural gas and liquids markets as well as first-hand experience on the implementation of procedures to guarantee not only regulatory compliance but also assure supply, demand and infrastructure review for a comprehensive advice in each of our client’s energy projects.