Mexican gas market controlled by Pemex

The Mexican gas market has reported an increase in gas production as a direct result of the promotion of gas fired power plants. In 2011, Mexico's natural gas production totalled 1,946.1 billion cubic feet with consumption totalling 2,089 billion in 2011.

The Southern Region of the country contains the largest share of proven reserves. However, the Northern Region likely will be the centre of future reserves growth, as it contains almost ten times as much probable and possible natural gas reserves as the Southern Region.

Mexico's gas exploration and production facilities are controlled by Pemex and due to government's restriction on private player upstream activity, Pemex has a complete monopoly on the upstream activity in Mexico.

Mexico has begun cutting natural gas supplies to some of its largest customers by as much as 45 percent of their orders to cope with ballooning demand from households to steelmakers such as Ternium SA (TX) and ArcelorMittal. (MT)

Pemex, started reductions on a case-by-case basis as the government studies forcing the measure on all companies. Pemex has increased imports from the US to records this year as its state-owned pipelines run at about 95 percent of capacity.

The Burgos Basin in northern Mexico has been a centre for natural gas exploration and production, and it currently represents about one-quarter of total natural production.

Pemex announced a service contract in 2009 that would upgrade infrastructure in the area to facilitate increased natural gas production. In 2010, three new gas fields began production in the Burgos Basin, Alambra, Arenaria, and Perillan.

In addition, Pemex produced its first shale gas in March, 2011 from an exploratory well at the Eagle Ford formation in the northeastern state of Coahuila.

For more information on the Mexican gas market, see the latest research: Mexican Gas Market

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