Mexico launches natural gas consultation

​Mexico put out to public and industry consultation a natural gas market policy to govern the gradual creation and operation of a liberalized market for the fuel in the country from 2017.

Authorities say opening up the sector to private players will also help guarantee supply.

The energy ministry (Sener) has published the policy outline, explaining how the new natural gas market will work, and which also covers areas such as market incentives.

Sener is seeking feedback from the public and industry.

The policy was created as part of steps being taken to achieve the aims of Mexico's energy reform, allowing for free market competition in the energy sector.

Under the new scheme, the price of natural gas will be determined domestically from 2018 according to supply and demand, in contrast with the current system under which prices are determined according to the price of the imported fuel.

Prices controls in the north of the country are due to be lifted in 2017 but remain in place in the south until 2018.

State oil firm Pemex and electricity utility CFE will have the right to reserve gas capacity for their energy generation and production processing needs, as determined by the hydrocarbons law, part of the energy reform legislation. The remaining capacity will then be assigned accordingly.

The national gas control centre (Cenagas) will announce open seasons during which companies will be able to bid for transportation contracts and consumers will then be able to sign supply contracts with the companies whose prices they perceive as the most competitive.

The first open season is due to be announced in the second half of the year, during which time Pemex will begin a gradual termination of its existing contracts with gas suppliers.

In 2018, price controls in the south of the country will be lifted, Pemex will conclude its cessation of contracts and new competitors will begin to participate in the country's natural gas market, the ministry said.

Mexico currently produces natural gas in the Gulf of Mexico and domestic demand is further met by imports into the ports of Altamira, on the Gulf, and Manzanillo on the Pacific coast, in addition to imports through pipelines from the US.

The country aims to double its natural gas pipeline network by 2018, adding 10,000km at a cost of around US$16bn.

The draft can be viewed here and feedback or comments sent to gasnatural@energia.gob.mx