Mexico will have to think about liquefied natural gas storage projects (LNG) as insurance to face any eventuality in the winter season, he suggested David Madero, executive director at Infrastructure Capital Fund.
“Without a doubt we will have to think about having some LNG stored to face the winter,” commented the natural gas specialist in an interview for Energy for Debate.
The winter season is approaching and demand along with energy prices tends to increase, mainly in the northern hemisphere of the planet. However, according to the indicators, the market At the moment it is stable with a Henry Hub price below $3 per million British thermal units (mmBTU).
Despite the above, There can always be a climatic or geopolitical eventuality that alters the international gas market, as happened with the freezing wave at the beginning of 2021 that paralyzed production in Texas and, therefore, deliveries to Mexico with the consequent impact on national electricity generation.
“It is like insurance because, at the end of the day, it is much more expensive and it would have to be valued as insurance to be clear that at least that storage can be used in the event of a supply interruption like the one we are talking about,” Madero added.
Supply and stable prices
The former director general of National Gas Control Center Natural (Cenagas) shared that he sees the natural gas scenario in Mexico as “calm” for the moment.
“Today, prices are quite moderate. “The future looks quite calm and in general the world is calm that things are not going to be complicated,” Madero said.
He also stated that the inventories of the United States, the main supplier of natural gas to Mexico, they are full.
“I agree that today the scene looks quite calm,” he added.
According to data from the Energy Information Administration (IEA) of the United States, the natural gas injection season ended in the 3 thousand 776 million cubic feet to last November 16, with which reached the highest amount of energy since 2020.
“We now have 5% more natural gas in US inventories entering the winter heating season than the previous five years (2018-22), and 7% more than last October 31,” the Agency stated in its most recent report.
In this regard, Madero highlighted the increase in gas production in the United States, which has doubled in the last ten years, thanks to the incorporation of many producing regions mainly in shale deposits, or shale gas.
Regarding the Henry Hub prices, This month of December 2023 there are less than half on average compared to the same season last year.
In the spot market, prices have fluctuated between 2.70 and 2.80 dollars per mmBTU, against 4.15 and 6.80 dollars per mmBTU in December 2022.
“Clearly it is a volatile world, it is a world in which many things can happen, the temperature can be colder than expected, but it is not this trend that it brings either,” Madero expressed.
He added that the United States is producing a lot of gas that it can export in the form of LNG, but there is also enough to send to Mexico.
“Imports to Mexico have been growing and maintaining without problems,” he claimed.
This, he added, mainly through pipelines thanks to the projects that have been developed lately, which also allows the price of energy to be cheaper.
2023-12-11 13:23:04
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