Mexico and the rest of Latin America are gaining importance on the international natural gas market stage in terms of infrastructure buildout, natural gas demand, and both imports and exports. See what NGI analysts gleaned from the recently completed 3Q2023 earnings season.
- Kinder Morgan Inc. (KMI): Mexico is building a number of new gas-fired power plants that don't yet have dedicated supply.
- KMI: Don't see themselves participating in foreign markets (read: Mexico).
- KMI: Interesting they said they were having issues recontracting South Texas assets, then several weeks later they bought South Texas midstream assets for $1.8 billion. Go figure.
- Halliburton Co. (HAL): Their Latin America revenue was up 5% Q/Q.
- Nabors Industries (NBR): Has real opportunities to grow in places like Argentina, Colombia and Mexico, the opportunity for the latter being platform rigs.
- BP plc (BP): has merchant gas sales in Mexico, more than 75K net acres in the Permian and a stated goal of growing their global LNG presence through 2030. Would they take some offtake capacity in the proposed Mexico LNG export facilities, especially given their displeasure with Venture Global right now? That would sure help move those projects along.
- Energy Transfer LP (ET): The company is NOT pursuing any increased natural gas pipeline capacity to Mexico right now since it is focused on increasing utilization on TransPecos and Comanche Trail. Co-CEO Mackie McCrea noted, “we still have quite a bit of capacity to fill up to fully utilize those pipelines. We have some pipelines in South Texas that we deliver either directly into Mexico or into other larger-diameter pipelines, but, no, we don't have anything on the drawing board. Yes, we are aware of some proposed pipelines out of the Waha area heading West, but we aren't involved in any of those projects at this time."
- Sempra (SRE): Mentioned two good general stats: 1.) Foreign direct investment in Mexico has risen ~40% 1H23 vs 1H22 2.) This year Mexico has surpassed China as the United States’ largest trading partner.
- Oneok Inc. (OKE): Per their October 2023 investor relations presentation, expect an FID decision on Saguaro Pipeline by year-end 2023. But that’s just 3 weeks from now folks. Saguaro LNG got another boost in early December when Woodside Energy Group Ltd. signed on as another offtaker, but maybe this gets pushed into 1H2024.
- New Fortress Energy Inc. (NFE): Has an agreement to sell the La Paz power plant to CFE in 2024, but NFE will continue to own the terminal and supply gas to the power plant until the sale closes.
- NFE: Altamira FLNG project should be online soon but was pushed back from planned October/November start.
- TC Energy Corp. (TRP): The lateral section of Villa de Reyes pipeline has been placed into service and the last remaining portion, the south section, is expected to go into service by the second half of 2024.
- TRP: Southeast Gateway, all onshore land has been acquired and construction on all three landfall sites is progressing as planned. Officials expect to begin installing the offshore pipe by YE23. Expected in-service date is mid-2025.
- Venezuela: OFS companies in general said it's too early to know what opportunities may exist from the U.S. lifting sanctions on Venezuela. However, our guess is the country/PDVSA would have to start making advancements on restitution for money they owe first. For example, ConocoPhillips management said, "They owe us a considerable amount of money through both our ICSID and our ICC claims, approaching over $8 billion. They owe us on the full judgment on the ICC, they still owe us $1.4 billion, $1.5 billion. So we're pursuing that pretty aggressively."
- Rigs: Mexico leads Latin America in working rig gains both year/year and month/month in November, although we aren't talking about a huge number here – 9 rigs year/year and 1 rig month/month. Still, that one rig pushed the operating rig count in Mexico to 59 and established Mexico as the country with the most working rigs in the region, one ahead of Argentina.
