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    Deficient Infrastructure Slows Down Natural Gas Storage in Mexico


    December 2, 2022 - CE Noticias Financieras

     

      Natural gas is a key fuel for Mexico's electricity generation and industrial activities. The country's lack of gas storage infrastructure puts energy security at risk and is exacerbated by abrupt supply and demand changes. Currently, Mexico has only 2.4 days of LNG storage available, even though the government has set five days as the minimum.

      According to the report "Natural Gas Storage for Energy Security" developed by the Mexican Institute for Competitiveness (IMCO), Mexico's 2018 Public Policy on Natural Gas Storage set the goal of gradually developing storage infrastructure to reach five days of inventory by 2026. To achieve this, the Mexican government planned to tender one of four exhausted onshore hydrocarbon deposits, Acuyo in Chiapas, Brazil in Tamaulipas, Jaf in Veracruz or Saramako in Tabasco, to be turned into an underground natural gas storage facility. However, since 2019, the development has stalled.

      To meet the targets set, the IMCO considered an investment of between US$428.3 million and US$2.594 billion. "The lower limit corresponds to non-economically viable technology of deposits for the extraction of fossil fuels, while the upper limit corresponds to the storage of natural gas," the report reads.

      There are four main technologies available to store gas: depleted or economically unviable hydrocarbons deposits, salt caves, confined aquifers and liquefied natural gas (LNG) tanks. IMCO emphasized that some of these storage methods are not the most efficient and are mainly used for fuel imports.

      IMCO put forward three proposals to increase strategic gas storage. First, the institute proposed to resume the public policy on natural gas storage of 2018 and update it to the current demand. The institute also suggested developing storage projects in depleted terrestrial hydrocarbon deposits. Finally, IMCO proposed studying Mexico's depleted deposits potential, considering the location, accessibility, and existing infrastructure.

      On a global scale, Mexico ranks well below the storage capacity of other countries such as Austria, with a storage capacity of 318.3 days, France, which boasts 98.8 days, Italy with 93.8 days, Germany with 89 days and Spain with 34.2 days. Mexico's USMCA partners, Canada and the US, have developed significant storage capacity in the 20th century.

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