Kinder Morgan Restores U.S.-Mexico Gas Flows After Pipeline Outage |

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Kinder Morgan Restores U.S.-Mexico Gas Flows After Pipeline Outage

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Julianne Geiger is a veteran energy journalist and market analyst with more than a decade of experience covering the global oil and gas sector. Her…

Kinder Morgan has lifted force majeure on its Tennessee Gas Pipeline after repairs restored natural gas deliveries to Mexico that had been interrupted earlier this week.

Tennessee Gas identified problems on October 5 and isolated sections of the system, including the Rio Bravo and Cenagas delivery meters. The company declared force majeure the following day. Kinder Morgan said Thursday that the problems had been resolved and shipments were being restored.

The outage was brief, but Mexico doesn’t have much room for even a brief one.

About 75% of the country’s natural gas comes from Texas, making Mexico the largest buyer of U.S. pipeline gas. American exports south of the border have climbed from roughly 1 billion cubic feet per day in 2010 to around 8 Bcf/d today.

Mexican pipeline operator CENAGAS had been warned that flows could fall by as much as 20% during the outage. Director Cuitlahuac Garcia described the situation as critical.

Mexico has roughly three days of gas reserves, according to Garcia. The country does not have large-scale underground storage comparable to the United States, leaving its power sector heavily dependent on continuous pipeline deliveries from the north.

That dependence has grown along with Mexico’s use of natural gas for electricity generation and industrial demand.

President Claudia Sheinbaum’s government has started exploring limited use of hydraulic fracturing to increase domestic gas production. Mexico is also planning about $8 billion in pipeline investment to strengthen its gas network.

Neither addresses the storage problem quickly.

Tennessee Gas Pipeline moves gas from producing regions in Louisiana, South Texas, the Gulf Coast and Appalachia into markets across the United States, Canada and Mexico. Interruptions on sections feeding the Mexican border can therefore reach far beyond the affected pipe itself.

This week’s outage did not last long enough to create a prolonged supply shortage. It did give Mexico another look at the arithmetic behind its gas system: roughly 8 Bcf/d arriving from the United States, three days of reserve supply, and a grid that cannot afford many interruptions.

By Julianne Geiger for Oilprice.com

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