US natural gas pipeline exports to Mexico set monthly high in June

US natural gas pipeline exports to Mexico for June 2023 reached a record daily average of 6.8 bcfd, according to data provided by Wood Mackenzie and the US Energy Information Administration (EIA). This figure surpassed the previous record set in June 2021 by a margin of 0.1 bcfd.

Throughout June 2023, US natural gas exports to Mexico exceeded 7.0 bcfd on 9 days. This uptick was primarily driven by higher-than-normal temperatures that increased demand for natural gas in Mexico’s electric power sector.

Notably, the US tends to witness peak natural gas pipeline exports to Mexico during the summer months due to increased demand for electricity to power air conditioning. Over the period since 2018, Mexico's electric power sector consumption has seen a consistent annual growth of 3%, according to Wood Mackenzie data.

In first-half 2023, US natural gas pipeline exports to Mexico held an average of 5.9 bcfd, similar to the record-high average of 6.0 bcfd in first-half 2021. After declining in 2022, US natural gas pipeline exports to Mexico have returned to the highs of 2021.

During 2022, Mexico managed to elevate its domestic natural gas production by a substantial 14%, equivalent to 0.3 bcfd. This increase led to a reduction in Mexico's reliance on natural gas pipeline imports from the US. During first-half 2023, Mexico's domestic production remained unchanged compared with 2022; however, demand experienced growth. To bridge this gap, gas pipeline imports from the US experienced a 3% rise, or 0.2 bcfd.

The growth of US natural gas pipeline exports to Mexico has been facilitated by the expansion of Mexico's domestic pipeline network in recent years:

• In 2020, the Wahalajara system, a group of pipelines that connects the Waha hub in West Texas to Guadalajara and other population centers in west-central Mexico, was completed. The Villa de Reyes–Aguascalientes–Guadalajara pipeline system (0.9 bcfd capacity), which connects to several other pipelines in Central Mexico, was placed in service that year. The Sierrita pipeline, which transports natural gas from Arizona to the Mexican border, was expanded by 0.3 bcfd.
• In 2021, the Mier-Monterrey pipeline (0.2 bcfd) was expanded. This pipeline delivers natural gas from US connecting pipeline NET Mexico in South Texas to the Monterrey Hub in northeastern Mexico. The Samalayuca-Sásabe pipeline (0.5 bcfd capacity), which transports natural gas from the Permian basin in West Texas and eastern New Mexico to northwestern Mexico, entered service.
• In 2022, two more pipelines that deliver natural gas to Mexico’s capital city region went into partial service: the Tula–Villa de Reyes pipeline (0.9 bcfd) is expected to begin full service in 2023, and the Tuxpan–Tula pipeline (0.9 bcfd) is expected to begin full service in 2025.
• In 2023, the Cuxtal Phase II pipeline—the second segment of the Energía Mayakan pipeline—is expected to enter service. The Energía Mayakan pipeline expands the natural gas pipeline network on the Yucatán Peninsula.