Natural gas needed: Mexico to rely increasingly on US imports

5/15/2017 The Hill

natural gas drillThe onshore rig count in Mexico fell to one in March, a particularly ominous sign for a country that is attempting to dramatically increase its reliance on natural gas for power generation.

With a declining domestic resource base, Mexico will increasingly rely on U.S. pipeline gas and imported liquefied natural gas (LNG) and may be forced to backtrack in the short term on some of its energy goals by returning to heavier reliance on oil for power generation.

Total Mexican dry gas production fell to only 3.2 billion cubic feet per day in March, according to the most recent data from Mexico’s Secretaría de Energía (SENER) data. That marks a 30-million cubic feet per day (MMcf/d), or 0.9-percent, drop from April and a 14-percent (530 MMcf/d) decline from March 2016 levels.

Surprisingly, dry gas production has remained relatively stable since last November, averaging 3.2 Bcf/d over the last five months. However, the complete absence of drilling activity will likely lead to a resumption of production declines through the rest of the year and into 2018.

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