Eagle Ford Natural Gas: Major Pipelines Planned to Expand Towards Mexico

Natural gas pipelinesInfrastructure is set to move further, as Eagle Ford natural gas expansions are headed for Mexico. This is good news for Eagle Ford shale growth, as this multimillion project is set to focus on industrial cities. The Mexican Energy Minister, Jordy Herrera, expresses that this unique opportunity offers competitiveness for the country’s industry. (Read full story.)

The developments:

Proposed Mexican infrastructure will be backed up by U.S. companies

Eagle Ford Shale reports that the expansion plans are set to realize with the support of U.S. companies. As reported:

“U.S. companies are lining up to help supply and construct the proposed Mexican infrastructure. Expect to see companies like Kinder Morgan reverse the direction of some of its current natural gas flows and expand pipelines into Mexico. The Eagle Ford currently produces almost 3 bcf/d, but that number could almost triple over the next five years.

That’s a lot of natural gas to be absorbed in South Texas. Actually, it’s much more than the region can absorb. If 5+ bcf/d of additional supply comes online, the natural gas will need a market. That market will either come from Mexico or from across the globe shipped as LNG. Both pipelines and liquefaction facilities come with big price tags, but don’t expect PEMEX (Mexico’s national oil company) to wait around. The country needs natural gas and the Eagle Ford is positioned well to answer.”

Multibillion dollar investments

Looking into the figures, Chron reports:

“Mexico energy planners are pressing ahead with an $8 billion expansion of the country’s 5,500-mile natural gas pipeline system, focusing on central and northern industrial cities. And for the foreseeable future, they intend to fuel that network with U.S. natural gas, including from South Texas and Eagle Ford Shale fields.”

“Mexico has a unique opportunity; we have access to the world’s cheapest gas,” Mexican Energy Minister Jordy Herrera said of the U.S. supply in announcing the new pipeline plans earlier this year. “This is competitiveness for the industry of our country.”

Profits are high as Kinder Morgan and other Houston-based pipeline and gas companies are lining up.

“Kinder Morgan continually looks for ways to optimize its existing pipeline system and expand deliverability,” the company said in a statement Friday. “In Mexico, there is a growing need for additional supplies.”

Demands on the hike

Albeit uncertain as constitutional debates are set to begin on September 1 by the new Congress, Enrique Peña Nieto, president of the economic team, presses for rapid development of the so-called world’s fourth largest reserves of alternative fuel. U.S. and other foreign investors will be key instruments to back up these plans. Chron reports:

“In the meantime, Mexico’s natural gas consumption continues climbing – at times in the past decade at four times the pace of overall economic growth. New supplies of gas have to be found and more pipeline laid to carry them to consumers.”

“Herrera and other officials say taking advantage of that supply – most of which will come from Texas – first will mean a dramatic build-out of the country’s pipeline grid, which under-supplies many of the fastest growing industrial cities of the heartland of Mexico.”

The development towards Mexico brings in optimistic gains to investors. This is in conjunction with the high demand for unconventional fuel.

What do you think of the prospects for pipeline movements to Mexico? Share your thoughts by writing in the comments below.

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