En Español



Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

Mexico's opens the natural gas capacity reservation system ENAGAS new market model



Mexico's natural gas market goes foward in evolutionary step

MEXICO CITY
Petroleumworld 07 12 2017

The first days of operations under Mexico's new natural gas  capacity reservation system have gone relatively smoothly, according to pipeline system operator Centro Nacional de Control del Gas Natural (Cenagas).

In general, the market “has been functioning quite well, and we've managed to get through it without any operational snags,” Cenagas director David Madero told NGI last Friday. “Of course, it's a transitional phase. We've been working with all the participants who want to make nominations and receive services, so that they can get used to the new way of operating.”

On July 1, Mexico's energy regulator, the Comision Reguladora de Energia (CRE), began enforcing the capacity-based contracting model, implemented as part of the country's efforts to liberalize its natural gas market. Cenagas in May awarded the first contracts with one-year terms via an  open season for domestic pipeline capacity on the Integrated Natural Gas Transport and Storage System (Sistrangas).

The new market model is expected to present a steep learning curve for participants, particularly among smaller players. Cenagas held three rounds of training sessions for its clients ahead of the July 1 start date.

“It's a continuous process that we are carrying out with all of them, so that any problems they may have when operating under the new regime and using the new software…are as minimal as possible,” Madero said.

Moreover, although July 1 marked an important move toward open competition, the Mexican natural gas market remains in a fledgling state.

“It's the first step in what will logically be a very prolonged process,” Fermaca's Raul Monteforte, chief development officer at the private pipeline developer, told NGI . “Our market is still very incipient. Little by little, we will have to go through additional phases of liberalization, the acceleration and deepening of open access, [and] the release of state-held marketing portfolios to agents in the competitive market.”

Mexico's first open season and the subsequent implementation of its capacity reservation system have allowed new shippers to enter the transportation market, but government-owned firms remain dominant players.

Last October, the Mexican government held a closed Round 0 to assign pipeline capacity for the operations of its state enterprises. National oil company Petroleos Mexicanos (Pemex), state power utility Comision Federal de Electricidad (CFE) and independent power producers (IPPs), which sell electricity to CFE through long-term contracts, picked up 4 Bcf/d of capacity.

This left only 2.2 Bcf/d available in the 6.2 Bcf/d Sistrangas system for the open season in May.  In that auction, 24 private companies won 41% of the capacity on offer, while the remaining 59% went to a Pemex subsidiary.

It will also take time for a secondary market to emerge where companies may buy and sell excess transportation capacity. After the open season concluded, participants were allowed to swap capacity, in what amounted to a practice run for a secondary market, Madero said.

The terms and conditions for Cenagas in its role as technical operator of Sistrangas, which CRE approved in 2016, also include some provisions on capacity release mechanisms, but these are too rigid for a full-fledged secondary market to develop, according to Cenegas' Eduardo Prud'homme, head of the planning and technical unit.

As such, the operator and the regulator are working in parallel to develop, respectively, a platform and the operational rules for the secondary capacity market.

“We meet with the CRE every week,” Prud'homme told NGI . “The problem is that the regulatory agenda is very packed and the subjects to address are quite broad.”

“The secondary market is very important, but for now we don't have a finished draft” of the rules, he said. “And obviously since this will be a regulated process, the draft will have to go through a public consultation. So it will take a few months.”



Story by Peter de Montmollin from Natural Gas intelligence NGI.

naturalgasintel.com
07 11 2017

We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels


Jul 12, 2007/ 09:00 hrs
Follow alive

 

 

 

 

TOP

Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld ™  / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.