Key facts
- Kinder Morgan restored natural gas deliveries to Mexico after an outage on its Tennessee Gas Pipeline.
- The outage occurred on October 5 and led to a force majeure declaration on October 6.
- Mexico relies on the U.S. for about 75% of its natural gas supply.
- U.S. natural gas exports to Mexico have increased to around 8 billion cubic feet per day.
- Mexican pipeline operator CENAGAS warned of a potential 20% drop in flows during the outage.
- Mexico has approximately three days of gas reserves.
Kinder Morgan has lifted force majeure on its Tennessee Gas Pipeline, restoring natural gas deliveries to Mexico after an outage that began earlier this week. The company identified problems on October 5, isolated sections of the system, and declared force majeure the following day. Shipments were being restored on Thursday.
The brief outage underscored Mexico's significant dependence on U.S. natural gas, with approximately 75% of its supply originating from Texas. U.S. pipeline exports to Mexico have grown substantially, reaching around 8 billion cubic feet per day. Mexican pipeline operator CENAGAS had warned that flows could decrease by as much as 20% during the interruption, with Director Cuitlahuac Garcia describing the situation as critical.
Mexico possesses only about three days of gas reserves and lacks large-scale underground storage facilities, making its power sector highly reliant on continuous pipeline deliveries from the U.S. This reliance has increased as Mexico uses more natural gas for electricity generation and industrial purposes. President Claudia Sheinbaum's administration is exploring options like limited hydraulic fracturing for domestic production and planning pipeline investments, though these do not immediately address the storage issue.
The Tennessee Gas Pipeline transports gas from various U.S. producing regions to markets in the U.S., Canada, and Mexico. Interruptions on lines feeding the Mexican border can have ripple effects beyond the immediate pipeline. While this week's outage was not long enough to cause a prolonged shortage, it served as a stark reminder of Mexico's energy system's arithmetic: a substantial daily arrival from the U.S., limited reserves, and a grid vulnerable to disruptions.