Mexico imported a record amount of natural gas from the United States last year as it continued to ramp up the fuel’s use in the power and industrial sectors.
Natural gas trade across the border is mainly via U.S. pipeline shipments to Mexico. Mexico imported 6.2 Bcf/d from its northern neighbor in 2023, or 8% more than in 2022, according to data recently released by the U.S. Energy Information Administration (EIA).
This trend has continued through this year, despite some recent setbacks from strong storms impacting demand. According to Wood Mackenzie, Mexico has imported about 6.4 Bcf/d year-to-date through July 12, up 438 MMcf/d versus the same period last year.
Natural gas to Mexico represented 13% of all U.S. energy exports to Mexico in 2023, EIA researchers said. Lower prices in 2023 decreased the trade value of natural gas shipments by 52% from 2022.
The U.S. benchmark Henry Hub natural gas price averaged $2.57/MMBtu in 2023, about a 62% drop from the 2022 averages, according to EIA,. This year, gas prices also have remained low. NGI’s July Bidweek National Avg. climbed 40.0 cents month/month to $2.215, but that was down from $2.560 a year earlier, NGI’s Bidweek Historical Data show.
Looking ahead, EIA in its latest Short-Term Energy Outlook forecast Henry Hub prices would average $2.90 during the final six months of 2024, up 80.0 cents from estimates previously given.
The value of all energy trade between the United States and Mexico decreased almost 15% to $66.5 billion in 2023 from $77.8 billion in 2022, adjusted for inflation. Lower fuel prices offset the increase in the volume of energy trade between the two countries.
Energy trade value “represents the total value of energy imports and exports between the two countries. It is influenced by both commodity prices and the volume of commodities imported and exported,” researchers said.
The value of inflation-adjusted U.S. energy exports to Mexico declined by 19% in 2023. The value of inflation-adjusted energy imports from Mexico decreased by 6% in 2023, according to data from the U.S. Census Bureau.
In 2023, Mexico also was the largest export market for U.S. petroleum products. “Mexico has an aging refinery system and struggles to maintain the output needed to satisfy its domestic petroleum product demand,” EIA researchers said.
U.S. petroleum product exports to Mexico averaged 1.2 million b/d in 2023, up 1% from 2022. Again due to lower prices, the total value of the trade decreased by 9% when adjusted for inflation, dropping to $36 billion in 2023 from $40 billion in 2022.
The United States, meanwhile, saw its imports of Mexican crude rise in 2023. U.S. crude oil imports from Mexico averaged 733,000 b/d, 15% more than in 2022.
The United States and Mexico also trade a small amount of electricity, primarily into California, New Mexico, and Texas where transmission lines cross the border. In 2023, U.S. electricity imports from Mexico increased by 20% year/year to 5.7 TWh, while U.S. electricity exports to Mexico decreased by 65% to 1.8 TWh.
