Midstream companies in south Texas have the opportunity to reap big rewards by helping Mexico expand its energy industry.
Mexico's new energy reforms launched in 2014 and unleashed a demand for billions of dollars to grow the country's infrastructure. Mexico’s state-owned company, the Comisión Federal de Electricidad (CFE), stepped up its efforts to woo Eagle Ford companies and is soliciting contract bids for $10.3 billion in new pipelines projects.
One Eagle Ford smart businessman seized on this opportunity right from the beginning. Mike Howard, owner of Howard Energy Partners, purchased a network of pipelines to move natural gas from South Texas’ Eagle Ford wells in 2011 and soon began thinking about expanding across the border. In June, his company began negotiating with Mexican natural gas buyers in order to move forward with a new 200-mile natural gas pipeline from Webb County to the manufacturing and industrial hub of Escobedo in Nuevo León, Mexico.
Wood Mackenzie predicts that Mexico’s demand for natural gas will increase by about one-third by 2020 at the same time that U.S. natural gas exports to Mexico could more than double. This will require thousands of miles of pipeline to get the product across the border and more opportunity for Eagle Ford companies.