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    Mexican Capacity in Gas Grid Overbid

Summary

Mexico’s gas transmission system operator Cenagas has sold rights to use the gas grid, the US Energy Information Agency (EIA) said July 20.

by: William Powell

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Natural Gas & LNG News, Americas, Corporate, Contracts and tenders, Political, Contracts and tenders, Infrastructure, , News By Country, Mexico

Mexican Capacity in Gas Grid Overbid

Mexico’s gas transmission system operator Cenagas has auctioned capacity rights on the country’s natural gas pipeline grid and discovered there was more demand than supply, the US Energy Information Agency (EIA) said July 20. Cenagas controls 6,256 miles of pipeline and a total transportation capacity of 6.3bn ft/day.

The first round of auctions was solely for Mexican companies where 4.1bn ft³/d of the total capacity was sold. Of that, 1.1bn ft³/d was reserved for Mexico’s Federal Electricity Commission, 1.4bn ft³/d for Pemex and 1.6bn ft³/d reserved for Mexico’s independent power producers.

About 2.2bn ft³/d of capacity remained for the second phase in May 2017, and 24 local and international companies requested capacity rights totalling 3.6bn ft³/d, more than half as much again as the 2.2bn ft³/d available.

An additional 1.3bn ft³/d was awarded to Pemex. The next-largest shares went to French Engie and ArcelorMittal, each getting 7% of the Round 1 allocation, and to Shell Trading Mexico and Grupo Alpha, which acquired 6% and 5%, respectively. The remaining 15% went to 19 other companies. Many of the winners are in the natural gas retailing and marketing business, although the list also includes industrial customers such as steel and cement companies, the EIA said. Companies began their one-year contracts on July 1. The Gulf region was the most heavily oversubscribed.

On July 10, Cenagas held another auction for five cross-border pipelines assigned to the Federal Electricity Commission. However, the auction was declared void, because even though several companies expressed interest, no parties submitted final bids, EIA said.

 

William Powell