Speaker Q&A Series – David Madero, General Director, CENAGAS
With the Mexican Energy Series approaching, The Energy Dialogues team is running a Speaker Q&A Series to bring first-hand content from our speakers to our network.
We had the opportunity to speak with one of our featured experts on Midstream Day: David Madero, General Director, CENAGAS:
Q: What is the state of midstream investment in natural gas, from your perspective, and where do you think the biggest opportunities lie?
A: In midstream, the biggest opportunity right now will be in storage. Gas storage is probably the next addition in the natural gas midstream segment, where we currently have no storage except for LNG terminals. We’re looking forward this year to having a set of depleted reservoirs that we can make public, so that potential investors can start looking at technical information. The idea is to be able to launch one or two of these fields as storage projects before the year ends. We have been mandated by public policy from the Ministry of Energy to make sure that we have 45 billion cubic feet of natural gas storage by 2025. More opportunities will arise because we are creating interconnections between our pipelines and some of the new pipelines being built as well as new compressor stations on their contracts with CENAGAS.
Q: How do you see clean energy projects affecting the midstream sector?
A: We look forward to having the Mexican economy transition into a cleaner energy matrix. We think that will also create big challenges for natural gas transportation. Flexibility, for example, will become more important over time. Natural gas can and will be extensively used as the backup transition fuel toward the cleaner energy matrix but that will need to have storage and flexibility in the pipelines in order to be able to feed the gas power generation plants when they need it.
Q: It is said that there is an expansion underway in trade and development in the midstream sector, do you agree?
A: With the energy reform and the creation of CENAGAS we have effectively broken the vertical integration that used to exist in natural gas. This has resulted in 97% of the capacity of our pipelines currently placed with our customers. This is creating a new wave of opportunity, together with the liberalization of prices, and we are seeing companies making serious attempts to grow their commercialization portfolio in Mexico.
Q: What do you think are the biggest issues in the midstream sector today?
Right now, one has to put things in perspective. Mexico is undergoing very large expansion of the transportation capacity in the country, basically doubling up on the kilometers of pipelines for natural gas transportation. By 2020, for the first time, Mexico will probably have more capacity than demand. This scenario is a challenge for everybody who owns capacity or who has an investment in the pipeline system. The biggest challenge is to make sure this clean and cheap fuel is used as much as possible. We are optimistic that demand will grow faster as Mexico’s economy improves.
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Join us at this year’s Mexican Energy Series for either Upstream, Midstream or Power & Electricity Day—or all three—and increase success by creating valuable partnerships as well as learning about the most pressing issues in the North American energy industry through discourse and networking. Register today or contact us for more information:
Bena Leslie b.leslie@energy-dialogues.com
