Pipeline delays affecting US natural gas exports

A significant increase in US natural gas exports to Mexico is being capped by a slower-than-expected build out of pipelines in Mexico, according to Reuters. The news service reports that the increases in US natural gas in Mexico are far below available capacity at the border.

The latest rise in natural gas exports from the US to Mexico is apparently driven by demand from Mexico’s power sector. Reuters notes that over the last decade US gas exports to Mexico via pipeline have more than tripled to 4.9 billion cubic feet per day.

Reuters reports that this amount is still less than half the available US pipeline capacity into Mexico. Pipelines on the Mexican side of the border are facing delays of up to a year.

The U.S.-Mexico Nueva Era project, which includes the Impulsora pipeline in Texas, was originally expected to enter service in mid-2017. However, it did not become operational until mid-2018 due to construction delays on the Mexico side of the border.

These limitations to natural gas transportation capacity in Mexico have pushed the country to rely on more expensive LNG imports, Reuters reveals.