Eagle Ford Natural Gas is Headed for Mexico – Major Pipeline Expansions Planned

U.S. supplies almost 1.5 Bcf/d to Mexico and Eagle Ford growth could mean much more is on its way
Gas Pipeline Photo

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Eagle Ford natural gas pipeline expansions are headed for Mexico. An $8 billion expansion of Mexican natural gas infrastructure is being pushed forward. The early focus is on industrial cities in the northern half of the country where a $3 billion expansion is planned.

“Mexico has a unique opportunity, we have access to the world’s cheapest gas,” Mexican Energy Minister Jordy Herrera said of the U.S. supply in announcing the new pipeline plans earlier this year. “This is competitiveness for the industry of our country.”

U.S. companies are lining up to help supply and construct the proposed Mexican infrastructure. Expect to see companies like Kinder Morgan reverse the direction of some of its current natural gas flows and expand pipelines into Mexico. The Eagle Ford currently produces almost 3 bcf/d, but that number could almost triple over the next five years. That’s a lot of natural gas to be absorbed in South Texas. Actually, its much more than the region can absorb. If 5+ bcf/d of additional supply comes online, the natural gas will need a market. That market will either come from Mexico or from across the globe shipped as LNG. Both pipelines and liquefaction facilities come with big price tags, but don’t expect PEMEX (Mexico’s national oil company) to wait around. The country needs natural gas and the Eagle Ford is positioned well to answer.

Read the full story detailing Mexico’s plans at chron.com

Oil Prices Will Tell Eagle Ford Story

$70+ per barrel is important, but $100 per barrel is multiples better

Nice article from the chronicle over the weekend detailing the Dallas Fed report in light of falling oil prices. The article focuses on the world economy’s role in the Eagle Ford story. It’s much more important than you’d think.

If the world economy falters and oil prices crash, activity in South Texas will slow in step.

Read more at chron.com [Read more…]

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