Mexico Plans $8 Billion in Gas Pipelines to Boost Power Sector
(Bloomberg) --
Mexico is planning to invest 140 billion pesos ($8.1 billion) in new gas pipelines over the next four years, the latest step in President Claudia Sheinbaum’s plan to boost the country’s power generation.
State utility Comision Federal de Electricidad, or CFE, and pipeline network operator Cenagas will contribute, Energy Minister Luz Elena Gonzalez said in a media briefing on Thursday. CFE will build nine new pipelines, while Cenagas will construct three, and will also invest in repair and maintenance of existing infrastructure, she said.
Most of the planned pipelines are designed to strengthen Mexico’s quickly growing domestic network, while one project, the Naco-Hermosillo-Guaymas pipeline will boost its capacity for importing gas from the US network.
CFE is also planning to tender for two new gas-fueled power plants in the coming months. Seven plants are already being built, while four others have been tendered and are awaiting construction, Gonzalez said.
The planned pipeline build-out is part of a larger effort to meet Mexico’s growing demand for electricity, which is expected to surge by as much as 65 gigawatts by 2030. Sheinbaum has promised to invest a total of $23.4 billion over the course of her term to bolster the grid, which regularly suffers from seasonal blackouts.
Mexico is aiming to add 6 gigawatts of power generation capacity this year, and recently published new rules governing how private partners can sell electricity to the national grid.
Sheinbaum also wants state driller Petroleos Mexicanos to produce more gas domestically to ease the country’s longstanding dependence on US supplies, including plans to boost fracking. More than 60% of Mexico’s energy generation is powered by natural gas, and around 70% of that gas is imported from the US.
Mexico is also considering exporting gas to Guatemala, Sheinbaum said at the same briefing.
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