Mirage Energy Corp (MRGE)

[MoneyMike1]

I don't believe storage was exactly "off the table." More like not at the top of the "urgent to-do-list." (My comments will be in bold, and article excerpts will be in normal text.)

https://www.argusmedia.com/en/news/2123750-mirage-bets-on-mexicos-gas-storage-needs-over-wants

"Mexico's energy ministry crossed developing commercial natural gas storage off its urgent to-do list in its latest policy outline, but one Texas developer believes his company's project proposals still have a chance."

I believe this changed with Winter Storm Uri in February 2021. I think Mexico will be going with our storage project.

https://www.argusmedia.com/en/news/2187375-mexicos-cfe-reconsiders-gas-storage-after-outage

"Mexico's state power utility CFE plans to develop a fuels storage policy in order to mitigate future gas supply shortages such as those that triggered power outages across northern Mexico yesterday.

CFEnergia, CFE's fuels division, will develop "a strategic commercial and operative storage policy that will minimize negative impacts of abrupt price movements and drastic variations in the volumes ordered by Mexico to generate electricity," director Miguel Reyes said in a CFE board meeting yesterday.

Shortages in natural gas supply following record cold weather in Texas sparked power outages across northern Mexico yesterday affecting 4.7mn customers. Power supply has been re-established to around 80pc of customers, President Andres Manuel Lopez Obrador said today, but full service is not expected to resume until 18 February."

{snip}

Prior to the storm, "Lopez Obrador's government" had "abandoned plans to build 45 Bcf of commercial storage by 2026 with outside investment in favor of a more limited proposal that would include 3 Bcf of storage in salt caverns in Shalapa, Veracruz state and 3 Bcf at the Altamira LNG terminal, overseen by state pipeline operator Cenagas."

So I would think that AMLO would want 45 Bcf of storage at the bare minimum after Uri. Add to this that "everything was ready to start the operation of the Burgos system" before AMLO came in - https://investorshub.advfn.com/boards/read_msg.aspx?message_id=161931094

Other OECD countries average 80 days' worth of storage. https://nrgibroker.com/en/mexicos-natural-gas-dilemma/

Mexican natural gas imports are expected to grow to 9 Bcf per day by 2030.
https://www.naturalgasintel.com/tc-energy-eyeing-5-6b-in-mexico-natural-gas-investment-by-2025-citing-strong-fundamentals/

There was never a call for interest or tender put out with regards to natural gas storage, which gives me reason to believe we are involved.

Things have clearly been progressing with regards to some sort of storage:

________________________________________________________________

Article from Apr 29, 2021

https://www.naturalgasintel.com/mexico-natural-gas-market-spotlight-march-prices-come-back-to-earth-after-february-shock/

“There was also a higher-than-expected build in the South Central region, which saw inventories rise by 6 Bcf. This is the region most relevant to Mexico, which has no natural gas storage facilities. However, a contact in the market told NGI’s Mexico GPI that Mexico’s gas grid operator Cenagas is in discussions about developing domestic storage, mainly as a response to the import crisis experienced in February.”

Article from Aug 12, 2021

https://www.naturalgasintel.com/mexico-natural-gas-market-spotlight-strong-summer-prices-causing-domestic-headaches/

“A source told NGI’s Mexico GPI that talks over developing storage facilities in Mexico are advancing quickly. The storage would be developed by Sistrangas operator Cenagas in conjunction with state utility Comisión Federal de Electricidad (CFE), the source said. It would be welcome news; the idea was first considered in 2018.”


Article from Aug 24, 2021

https://www.naturalgasintel.com/mexico-natural-gas-market-calls-for-storage-capacity-sees-demand-soaring-over-next-decade/

“‘I think the best timing for storage is now,’ Gadex energy consultant Eduardo Prud’homme told NGI’s Mexico GPI. He noted the supply impacts from Uri are still fresh in people’s minds. He said multiple developers are working to develop storage projects in Mexico.”

Article from Oct 28, 2021

https://www.naturalgasintel.com/natural-gas-futures-remain-volatile-clients-nervous-as-cold-weather-nears-mexico-spotlight/

"A source told NGI’s Mexico GPI that in terms of strategic storage for this winter and in the years ahead, officials at the Sistrangas pipeline network operator Cenagas are 'in talks with different parties.' Something could be announced in 'the next few weeks.'"

Article from Nov 9, 2021

https://www.naturalgasintel.com/mexico-natural-gas-buyers-said-nervous-about-winter-supply-price-shocks/

"Natural gas buyers in Mexico are nervous about supply and price shocks similar to Winter Storm Uri happening again this winter, experts said Monday at the U.S.-Mexico LDC Forum in San Antonio, TX."

{snip}

"Mexican gas buyers 'always bring it up when I speak to them,' Lenton said. 'They were slammed by it completely unprepared, and there are still consequences from that event.'"

{snip}

“'The one thing I hear when I talk to Mexican buyers of natural gas is that they’re very, very nervous going into this winter,' he said. 'A lot of that has to do with prices, but there’s also an element that has to do with the winter storm last year.'
Mexico’s vulnerability to disruptions in gas supply 'clearly is a top-of-mind issue for many customers because many of them were exposed to shutdowns due to lack of physical availability,' said Igasamex’s Carlos Arriola, director general, during a panel at the forum. The firm develops and operates natural gas systems in Mexico."

{snip}

"Adding to the challenge, Lenton said, is a lack of natural gas storage capacity in Mexico, as well as the lack of a robust secondary market to optimize unused pipeline transport capacity.
He noted that in the last public consultation of the gas market conducted by Sistrangas pipeline grid operator Centro Nacional de Control del Gas Natural (Cenagas), participants stressed the urgency of adding storage capacity.
Where Are Mexico’s Gas Supply Challenges?
Although Mexico’s gas market challenges vary by region, a common thread is concern about 'gas availability, primarily related to the situation that we had back in February,' said Arriola. Abbott’s executive order on gas exports 'brought into the front how politically sensitive these types of issues can be, and how vulnerable to a great extent our current gas supply chain is due to lack of local production and to lack of storage.'"

Article from Nov 11, 2021

https://www.naturalgasintel.com/veracruz-salt-dome-natural-gas-storage-project-said-probable-mexico-spotlight/

"Following a tricky 2021 that has included a major disruption to its natural gas supply, the Mexican government is advancing plans for strategic storage.

Speaking Tuesday at the U.S.-Mexico LDC Forum in San Antonio, TX, Gadex consultant Eduardo Prud’homme said 'good discussions' were underway with a developer to build a salt dome storage facility in Veracruz. 'It’s very probable we will hear about it soon,' he said."

Article from Dec 9, 2021

https://www.naturalgasintel.com/relief-expected-as-winter-natural-gas-price-outlook-brightens-mexico-spotlight/

"In related news, Mexico Energy Minister Rocío Nahle this week met with officials from Cenagas, which manages the Sistrangas system. A source told NGI’s Mexico GPI that the meeting was around additional natural gas projects, with the potential Veracruz storage facility discussed."

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Now, starting from Nov 11, 2021, articles discussing natural gas storage have mentioned the Veracruz salt dome project. I believe this was due to an assumption by Eduardo Prud'homme. I think he heard that Mexico would be proceeding with the natural gas storage plan, and he assumed that meant they would continue on with the 5-year plan as previously outlined. https://www.naturalgasintel.com/mexicos-5-year-sistrangas-expansion-plan-focused-on-connectivity-south-southeast-natural-gas-access/

But this 6 Bcf project was mentioned pre-Uri. We know that things have changed a lot since then. I just don't think AMLO/Mexico would scrap a plan for 45 Bcf of storage in favor of one for 6 Bcf of storage, go through everything Mexico has gone through as a result of Uri, state that storage has now become a priority, only to build the 6 Bcf facility that they had originally planned to build anyway.

One final point regarding storage, as per the five-year plan by Sener, the first version released in Nov. 2020 can be found here.
https://www.gob.mx/sener/acciones-y-programas/plan-quinquenal-sistrangas-2020-2024-256588
The revision from Dec. 2021 can be found here.
https://www.gob.mx/sener/documentos/primera-revision-del-plan-quinquenal-de-expansion-del-sistrangas-2020-2024

I looked in the revision from Dec. 2021 and the exact wording of point 2.2.8 is "Currently, SENER and CENAGAS are working in a coordinated manner to define the strategy for storage of natural gas, which must be presented during the second review of the Five-Year Plan of Expansion of SISTRANGAS 2020-2024."

Note that 2.2.8 is supposed to be an update on "operational storage in salt caverns." Also, further down in the document on point 6.2 (PROJECTS OF THE FIRST ANNUAL REVIEW OF THE FIVE-YEAR PLAN 2020-2024 APPROVED BY SENER), I find it interesting that "operative storage" appears rather than the earlier phrasing of "operational storage in salt caverns." Also, mechanism of development and estimated investment are both "in definition," rather than having information related to the Veracruz salt cavern project.

GO MRGE!