Energy Advisor Publishes Q&A with Eduardo Canales on Outlook for Mexico’s Natural Gas Sector

Akin Gump oil and gas associate Eduardo Canales has been quoted in a Q&A column in Energy Advisor discussing how Mexico’s oil and gas sector will change as imports of natural gas from the United States increase and exports of oil decrease. He also addressed the issue of how Mexico can attract more foreign investment in order to develop its own non-conventional oil and gas resources in the future and how a shift in trends for Mexico’s natural gas sector will affect the country’s demand for liquefied natural gas (LNG) and its investments in renewable energy development.

The questions to which Canales responded come amid an expected 22 percent boost in U.S. natural gas deliveries to Mexico once the Los Ramones II pipeline begins operations later this month. Canales said the pipeline will be “an economic and industry game changer” connecting two energy industries that are “experiencing opposite realities.” Ultimately, he added, “the integration of Los Ramones into the National Pipeline System will benefit both countries.”

Canales thinks shale gas “will progressively become a bigger slice of the pie” in Mexico, even though natural gas imports are expected to continue increasing.  This, in turn, he said, will displace LNG cargoes from other countries, due to more favorable pricing and lower transportation, delivery and distribution costs.

Canales concluded that as U.S. producers continue producing natural gas despite low prices, Mexican power generators and industrial users in certain parts of the country “will be able to meet increasing energy consumption driven by the burgeoning manufacturing industry while taking advantage of cheap U.S. shale gas.”