Mirage Energy Corp (MRGE)

[Macod]

Government privileges liquefied gas deposits

For the experts, storage is not enough, public policies are required that allow the development of projects and a tax regime that makes them profitable
Pemex has to maximize the value of its infrastructure portfolio. REUTERS

Yeshua Ordaz
Mexico City /10.07.2023 03:07:03

The possibility of developing gas storage in natural caverns in Mexico, as is the case in other parts of the world, and thereby increasing national production and promoting energy self-sufficiency, is very expensive, which is why this government opted for natural gas deposits liquefied ( LNG ), confirmed the general director of Natural Gas and Petrochemicals of the Secretary of Energy ( Sener ), Victor David Palacios .

But for other experts in the sector, special public policies are also required to encourage the development of public and private projects, as well as a differentiated tax regime that makes them profitable due to the low price of the hydrocarbon that does not justify its extraction.

“You have to be honest, to store in abandoned wells or caverns the investment is very large. In addition, to 'launch' these projects, a large volume is necessary, known as working gas, we are talking about millions of dollars to obtain this working gas in each field and to be able to have that operation”, he commented.
The federal government has identified 46 caverns at its production limit, being candidates for underground storage of natural energy.

Using a value and risk methodology, the nine most ideal courses for this purpose are Jaf, Obertura, Vistoso, Lizamba, Chilapilla, José Colomo, Brasil, Apertura and Papán.

Of these nine fields, six are physically located in Veracruz, and are an area of ??opportunity to store gas and create a strategic supply that allows for energy self-sufficiency.

"But in this six-year term, storage as LNG is being favored, as is now being seen in Tamaulipas, Altamira and Coatzacoalcos, which will have a capacity of 450 million cubic feet per day," he stressed.
Despite the fact that Mexico is heavily dependent on natural gas imports from the United States, Víctor David Palacios highlighted the great work being done by the administration of President Andrés Manuel López Obrador to increase national production.

more is required

For the member of the National Hydrocarbons Commission ( CNH ), Néstor Martínez , not only the development of storage is enough, public policies are also needed to be able to make certain projects profitable that definitely could not be done at this time.

“If we have the fuel, there is a lot in the northern part of the country, also in Macuspana, for example, but we must not forget that the State productive company; Pemex Exploration and Production has to maximize the value of the project portfolio (...) What rules here is business, and if we want to be energy self-sufficient we will have to find some public policy for the country, which will also have to do with a differentiated tax regime”, he remarked.
Natural gas is currently worth 2.56 dollars per cubic meter, 42.3 percent less than what was registered at the beginning of 2023, making many projects not economically viable due to their low cost.

“Now is the time to focus on gas. Mexico has resources and little political will, a lot of activity and some incentives are required because particularly in Burgos it is going to compete with all the infrastructure and logistics that the Permian region has in the United States, obviously they are not going to produce at the same price”, said the managing director of energy consultancy IPD Latin America, John Padilla.
He also indicated that, in the case of Mexico, in order to have a fair energy transition, it is necessary to increase the production of LP gas, since the country is currently importing 75 percent of this fuel.

But the Global Vice President of Energy and International Affairs of Standard and Poor's, Carlos Pascual, stressed that private and state companies must be responsible and look at the reduction of emissions as something essential, in addition to accelerating energy production, this implies diversifying the energy sources and increase the production of natural gas and liquefied petroleum gas.

“For the nation there is a great opportunity in the production of natural gas, until now it does not produce much, but that can change. (...) Mexico is the only country that I can think of that by 2026, apart from the United States, has the assurance, the pipeline connection to the United States where they can import based on the prices determined by the demand," he said.
He also indicated that, in the case of our country, in order to have a fair energy transition, it is necessary to increase the production of LP gas, since Mexico is currently importing 75 percent of this fuel.

https://www.milenio.com/negocios/gobierno-privilegia-los-depositos-de-gas-licuado