U.S. Natural gas exports to Mexico have steadily been on the increase and grew by an astonishing 24% in 2012 alone to a new record of 1.69 billion cubic feet per day (Bcf/d). Imports now account for more than 30% of Mexico's natural gas total supply and that trend is expected to continue.
Growing industrial demand is driving increased consumption. According to EIA, "Between 2007 and 2011, natural gas consumption in Mexico rose 4% per year on average, while average annual natural gas production climbed only 1.2%. Growing demand in the industrial sector drove the increases in natural gas consumption in Mexico to a record-high level in 2011." Pipeline shipments from Texas to Mexico between 2009 and 2012 rose 34% on average per year to 1.3 Bcf/d and accounted for nearly 75% of the U.S. natural gas exports to Mexico in 2012.
But pipeline projects that could support additional natural gas exports to Mexico are in the works and the additions are expected to add up to 3.5 Bcf/d in additional export capacity -- twice the current pipeline capacity. Mexico plans to add about 28 gigawatts of new electric power generation capacity by 2027 which means that demand for U.S. natural gas should continue into the foreseeable future. Comision de Electricidad (CFE) -- Mexico's state-run electricity provider estimates that natural gas needs for power generation will increase by 5.1 Bcf/d by then.
As demand for natural gas increases in Mexico, the United states is gearing up to supply the need. Pipeline expansions will encourage the southward flow of natural gas exports, and will help both the United States and Mexico profit from the rich resources in the North American shale.