Mirage Energy Corp (MRGE)

[Macod]

Exclusive: CFE evaluates investing in strategic gas storage in the United States and Mexico

In an interview with Bloomberg Línea, the CEO of the subsidiaries CFEnergía and CFE Internacional talks about the plans to store natural gas

By Arturo Solis
June 20, 2023 | 04:00 AM

Mexico City — The Federal Electricity Commission (CFE), the Mexican state energy company, is studying options to invest in strategic natural gas storage near the US-Mexico border.

In an interview with Bloomberg Línea, the director of Cenagas spoke about the energy policy on hydrocarbon storage and the supply of gas to the industrial parks of the Interoceanic Corridor
In an exclusive interview with Bloomberg Línea , the CEO of the fuel trading and supply subsidiaries CFEnergía and CFE Internacional, Miguel Reyes Hernández, revealed that the company is studying gas storage options in the border area between the two countries.

“We are evaluating whether it is convenient for us to have storage in the north of the country in the Tamaulipas area or in what would be south Texas,” he said.

The manager said that there are two reasons for implementing strategic gas storage projects: energy security and profitability, since the objective is to reduce the losses left by the administration of former president Enrique Peña Nieto with the "long position" and the excess capacity to transport US natural gas that CFE has through pipelines.

The purpose, Reyes explained, is to take advantage of natural gas storage options when it is cheap and take it out when the price is higher and generate profitability for CFE that "allows it to sustain the price of electricity over time."

Due to the high investments required by strategic storage projects, CFE contemplates the participation of private partners.

"The investment would be mostly private so that we participate as minority partners," said the manager.

Reyes said that the storage plan will be defined in the next six-year term, which will begin in September 2024, but the current CFE administration will leave it open for the next one to execute.

Strategic storage consists of an inventory of gas and/or oil reserves to supply them in the event of an emergency declaration. Mexico is a net importer of natural gas, mostly from the United States through pipelines, and uses it to generate 60% of the electricity the country demands.

The country has an inventory strategy of 45 billion cubic feet, but it is in limbo.
Abraham David Alipi Mena, director of the National Center for Natural Gas Control (Cenagas), said in a previous interview that the institution only works on national natural gas surface storage projects for operational purposes so that the gas pipeline system operates without interruptions.

In September 2022, the Government of President Andrés Manuel López Obrador, through the Secretary of Energy (Sener), resumed the policy of former President Enrique Peña Nieto on natural gas storage to use 10 depleted oil fields to store the hydrocarbon.

With Peña Nieto, Cenagas coordinated the construction of a strategic inventory of at least five days for 45,000 million cubic feet of natural gas in 2026, but the arrival of López Obrador to the presidency left the project unfinished.

https://www.bloomberglinea.com/latinoamerica/mexico/exclusiva-cfe-evalua-invertir-en-almacenamiento-estrategico-de-gas-en-estados-unidos-y-mexico/