IPPs, gas suppliers win Mexico gas pipeline capacity
OREANDA-NEWS. October 14, 2016. Independent power producers in Mexico secured 24.8pc of natural gas pipeline capacity under a long-awaited first open season.
IPPs were awarded 1.56bn ft3 out of the system's total capacity of 6.3bn ft3. State-run oil company Pemex and state-run power utility CFE were allocated 1.37bn ft3 and 1.11bn ft3 of capacity, respectively.
Private-sector gas suppliers secured 615mn ft3 or 10pc of total capacity, while private-sector users that acquired capacity rights over the past few years were allocated 1.64bn ft3.
The names of the winning companies have yet to be published. The largest IPPs operating in Mexico include Spain's Iberdrola, Japan's Mitsui and Mitsubishi, and US utilities Intergen and AES.
Iberdola leads the pack with 5,395MW of installed capacity, including five combined-cycle plants accounting for 4,943MW. Intergen has six plants with a total installed capacity of 2,420MW. Mitsui owns and operates five combined-cycle plants with a total capacity of 2,233MW and one gas pipeline. AES counts two petroleum coke-fired plants and one 1,050MW combined-cycle plant.
Access to gas is seen as critical after gas-fired generation projects secured the bulk of the stand-by capacity in Mexico's recently held second power auction.
CFE, the only buyer in the auction, will sign 15-year supply contracts with 12 generators for a total of 1,187MW of stand-by capacity, 72pc of which will be for combined-cycle projects. The biggest stand-by winner was Blackstone Group subsidiary Fisterra Energy with a 475MW combined-cycle project.
Gas pipeline administrator Cenagas concluded the open season in September but has yet to officially publish the results.
Operation of the national gas pipeline system was transferred to Cenagas following the break-up of Pemex's monopoly on the oil and gas sector in historic reforms passed in 2014. This was the first open season to be held under the new regime.
The large amount of capacity secured by IPPs reflects the CFE's strategy to transition away from fuel oil-powered generation to gas. Much of the gas used in Mexico is coming in through a growing network of cross-border pipelines from the US. The balance comes from Pemex production or imported LNG.
In 2012 more than half of the country's states did not have access to gas pipelines and the pipelines that did exist were not interconnected.
Under an ambitious \\$16bn government program, some 10,000km of gas pipelines will be built by 2019, adding 85pc more than what the current administration says it inherited in 2012.
Tenders for construction of two new gas pipelines; the \\$643mn 247km Jaltipan-Salina Cruz pipeline and the \\$456mn 331km Lazaro C?rdenas-Acapulco pipeline, both considered "social" projects, are expected either this year or next.