At the Mexico Gas Summit, Tecpetrol representatives shared insights on shale gas production, infrastructure and energy markets, and explored the opportunities to reduce Mexico's dependence on imported natural gas.

Humberto Fernández, Vice President of Tecpetrol Mexico, and Adela Guillaumin, Commercial Manager at Techgen, which operates the Pesquería Power Plant, took part in the 12^th Mexico Gas Summit, one of North America’s leading energy industry events. Held in June in San Antonio, Texas, the conference has become a key forum for sharing insights and exploring opportunities among oil, gas and energy industry leaders from Mexico and the United States.

One of the main themes of Humberto Fernández's presentation was the importance of producing both gas and oil at market prices to attract the investment needed to reduce Mexico's dependence on imported gas. Humberto spoke on the opening day of the conference as part of the panel, "Development of Exploration and Production Infrastructure in Mexico."

“Mexico imports some of the cheapest gas in the world, produced from unconventional oil developments in the United States. This makes it very difficult for domestic production to compete economically, particularly at the outset, when it will face the raft of inefficiencies associated with the learning curve,” pointed out the executive. In this context, he stressed the need to adjust Mixed Contracts—a model developed by the Mexican authorities—and exploration and production allocations for oil and gas as tools to help achieve this objective.

“However, as part of an energy policy focused on sovereignty and reducing dependence on imports, Mexico needs to begin developing its own resources and start moving along that learning curve now,” he says.

Unconventional resource development is gaining traction in Mexico, where Tecpetrol has been operating for more than 20 years. “Tecpetrol has remained in close contact with the authorities and Pemex to help define the frameworks needed to make shale production viable, not only for gas but also for oil,” revealed Fernández.

“Pemex and Energy Ministry officials have visited Fortín de Piedra to learn from our experience. And we’ve also been exploring how Tecpetrol could contribute to new developments in Mexico,” Fernández said. Drawing on Tecpetrol’s experience in the Neuquén Basin, he highlighted two essential conditions: securing cash flow and establishing a strong supply chain.

This means having the pipelines and processing facilities needed to bring the gas up to specification, while also creating markets for its by-products. “Mexico already has the industrial base and oil and gas infrastructure to support this,” he added.

More flexibility in the markets

During the panel “Commercial Strategies for Natural Gas in Mexico: Opportunities and Considerations,” Adela Guillaumin shared her perspective on the market.

“Greater flexibility in Mexico’s natural gas and transportation markets would allow for more efficient supply management and the resale of unused transportation capacity,” she highlighted. “This type of flexibility would also benefit the power sector, given the mismatch between the operating hours of the U.S. gas market and the Mexican electricity market.”

Guillaumin also noted that measures such as gas storage are needed to mitigate the impact of disruptions to U.S. gas supplies.

Guillaumin pointed to Winter Storm Uri in 2021 as a case in point. “Although the storm hit the United States hardest, it also disrupted natural gas supplies to Mexico. Similar events are likely to happen again, so Mexico needs measures in place to limit their impact.”

In the longer term, she said, the best way to reduce this exposure is to develop Mexico’s own unconventional resources: an area where Tecpetrol has extensive experience.