LNG in Mexico: A Glimpse into the Future

Undoubtedly, the future of a large part of the industry depends on its migration to cleaner energy sources that are capable of complying with environmental regulations.

One of the options par excellence continues to be LNG, however, do we really know where this industry is at present and what the future outlook in Mexico is?

Within the companies that are dedicated to the trade and distribution of LNG, doubts often arise about whether the business of this energy will continue to be viable, especially in seasons where sales decrease considerably, and in the face of these doubts, the answer is resounding: YES, IT WILL BE.

The reforms presented by the Federal Government at the end of 2024 significantly open up the growth panorama for LNG, since one of the main objectives of the Federal Government is to reach 45% of electricity generation through clean energies by 2030, compared to the 24.3% registered in 2024.

According to the Public Consultation carried out in 2024 by the National Center for Natural Gas Control (Cenagas) within the industrial sector, demand will continue to grow exponentially for at least the next 15 years. It is estimated that the national demand for LNG in 2030 will be 11.00% higher than expected for 2025 and for the year 2040 it is estimated to have an increase of 25% compared to the present year.

This calculation of demand takes into account the supply that already exists and is served by a transport system, as well as the additional one (which is the increase in capacity), and the new one, which refers to other volumes that are not yet interconnected to the gas pipelines through which the energy is transported.

One of the main areas of great opportunity is the electricity industry, which currently depends mostly on fossil fuels for its generation and it is the government itself that seeks to make this transition to less polluting energies, starting with the
CFE itself.

In Mexico, there are 4 fundamental aspects where there is a great area of opportunity for investment and development in the LNG sector for both the public and private sectors:

• Storage
  Mexico does not have large-scale storage of this fuel, a situation that leaves it in a position of vulnerability to possible supply interruptions. 1 In 2018, the objective of having five days of inventories by 2026 was established. However, this goal did not register any progress.
• Transport
  Currently, there are entities without the presence of this fuel such as Baja California Sur, Guerrero, Nayarit and Chiapas, while Zacatecas and Morelos register marginal consumption.
• Production
  Between January 2010 and September 2024, total national natural gas production fell by 35.1%. The country runs a great risk of energy security by depending on a single supplier for the supply of most of its consumption and that is why the government has begun to offer schemes with attractive incentives to bet on national production in association with the private sector.
• LNG Export
  The emergence of liquefied natural gas (LNG) as a global market opens an opportunity for Mexico to export natural gas overseas, offering the possibility of consolidating itself as a relevant exporter to other markets.

As we can see, the "viability" of this business actually depends on the capacity and vision of companies to take advantage of the wide range of modalities of trade and exploitation of LNG that have not yet been implemented in our country and that can guarantee their survival in the market for at least 15 more years.

By Financial Analysis Manager, Rodrigo Ruben Vega Buendia from Énestas – Raw Materials and Fuels.

References

https://www.jornada.com.mx/2024/09/15/economia/016n3eco

https://edomexaldia.com/2025-claves-para-impulsar-la-transicion-energetica-en-
mexico/

https://imco.org.mx/gas-natural-aliado-de-la-transicion-energetica-y-promotor-de-
desarrollo-y-prosperidad/