Ignore the Mexican NatGas Market at Your Own Peril
For some time now, MDN has had its eye on Mexico. Following landmark reforms in 2013 and 2014, Mexico’s oil and gas markets have been freed from strict government control. Mexico is interested in attracting foreign (i.e. U.S.) investment. While renewable energy prospects in Mexico grabbed much of the attention in mainstream media, the core of the energy reform effort lies in the expansion of Mexico’s natural gas market. Not only is power generation heavily focused on increasing capacity through gas-fired combined cycle power plants, but consumption by industrial users is also expected to rise at a steady pace in the coming decades. Mexico is already, and will become even more so, an incredibly important market for U.S. natural gas. NGI (Natural Gas Intelligence) knows just how critical Mexico is becoming to the U.S. and recently launched a new daily news and data service called the Mexico Gas Price Index (MGPI). Why is MDN psyched about MGPI, and what does it have to do with the Marcellus/Utica?…
We’ll answer the second question first. There are three ways what’s happening in Mexico intersects with the Marcellus/Utica:
First, some of our gas may end up flowing across the border. Maybe not today or tomorrow, but there are pipeline projects that already do, or soon will, carry our gas to the Gulf Coast. From there, it’s a short trip over the border. Mexico may become an important future market for Marcellus/Utica gas.
Second, even if our gas never flows across the border (unlikely), gas from Texas, Louisiana and Oklahoma will. As gas from those plays go south of the border, it means that gas no longer goes north to compete with Marcellus/Utica gas and opens up more markets for our gas in the Midwest and Southeast.
And third, as more American gas flows south of the border–from whichever source–prices at the Henry Hub (and everywhere else, including the Marcellus/Utica) will go higher. It’s simple economics: less supply here at home, same demand, equal higher prices. Mexico’s natgas market bears watching, and watching closely.
Why We are Psyched About MGPI
The best way to keep track of the Mexican natgas market is with MGPI. Period. End of sentence.
MGPI is jam-packed with great information. The service includes:
- News
- Spot prices at important trading hubs at or near the border with Mexico
- Prices for gas as delivered in Mexico (with transportation costs included)
- A cross-border “flow tracker” chat, to daily show you know how much gas is flowing across the border (and where)
- Forward prices, the market’s prediction of what natgas prices will be at various locations in the future
- Day-ahead electricity prices in Mexico
- Storage data
- And much more!
The best way to illustrate just how awesome MGPI is, is via a sample. Here’s the Feb. 8th issue:
For a full description of this awesome service, visit this page.
A one-year subscription is only $550 (or $59/monthly). If you work in the oil and gas industry, you need MGPI. If you work in the oil and gas industry and you’re sitting in Texas, Louisiana, Oklahoma or New Mexico, MGPI is a necessity. Frankly, you’re crazy if you don’t subscribe! You cannot ignore this critical market. Sign up now. We guarantee you will love it.