Low US Gas Prices Pose Challenge For Mexico Plan to Pipe in Supply

摘要

As part of a long-term strategy to reduce electricity costs and spur economic development, Mexico is engaged in a major campaign to expand its network of gas pipelines and replace inefficient, fuel oil-powered power plants with new, gas-fired generating capacity. The plan - at least until such time as the country's incipient energy liberalization leads to increased gas production from new upstream investment - is to import the needed gas from the US. Yet, with the Henry Hub gas price slumping along with crude prices, worries are emerging that US gas producers will cut back output, leaving the US with less gas to export than Mexico has been bargaining for.