Mexico’s national utility Comisión Federal de Electricidad (CFE) through its international marketing subsidiary CFE International LLC (CFEi) has put out a bid for proposals for the supply of natural gas from Texas.
CFEi is the U.S.-based entity responsible for procuring natural gas to support power generation and other needs in Mexico.
The Mexican state giant is looking for companies to supply physical gas for three to five years at one or more delivery points in both South and West Texas. Bidders may submit more than one proposal, CFEi said.
Interested parties should submit their bids to: proposals@cfeinternational.com
CFEi said bidders must communicate their intention to participate by Friday, Oct. 6. The deadline to receive proposals is Oct. 23, and winners will be announced on Oct. 31.
The company is looking for firm delivery with a base quantity of 10,000-500,000 MMBtu/d for a period of up to five years starting next March. CFEi would give preference to proposals that provide an option to increase or decrease the contract’s quantity by up to 10% for each day of the applicable month.
Details on pricing and the delivery points can be found here.
Growing NatGas Needs
CFEi was the largest net purchaser of U.S. natural gas in 2022, according to data from the U.S. Federal Energy Regulatory Commission, aka FERC. CFEi’s net gas purchases totaled 1158.7 TBtu last year, equivalent to about 3.17 Bcf/d, according to FERC’s Form 552.
CFEi is also one of North America’s top natural gas marketers.
“The natural gas is to fulfill the present and future needs of natural gas in Mexico,” a spokesperson for CFEi told NGI’s Mexico GPI about the latest tender. “There is no particular project.”
Natural gas demand in Mexico is set to grow with numerous big ticket projects in development. Last year, President Andrés Manuel López Obrador’s team said they would carry out major infrastructure works in conjunction with the private sector. These include 7 GW of combined cycle generation plants, natural gas pipelines, and LNG export projects.
There are as many as six liquefied natural gas export projects planned for Mexico. These projects would re-export U.S. gas to Europe and Asia.
New Fortress Energy Inc. (NFE) has shipped the final jack-up rig to complete its first floating liquefaction facility offshore Mexico’s east coast and now expects first LNG production by next month. NFE said that commercial operations could start between late October and early November. Gas would be sourced from CFE via South Texas.
Midstreamer Oneok Inc. meanwhile hopes to reach a final investment decision (FID) on its proposed 2.8 Bcf/d Saguaro Connector natural gas pipeline later this year. The 155-mile pipeline would transport natural gas from the Waha hub in West Texas to the Mexico border. It would serve the Saguaro LNG export terminal proposed by Mexico Pacific Ltd. LLC, which also has yet to reach FID.
Canada’s TC Energy Corp. is advancing the Southeast Gateway project, as well as the Villa de Reyes and Tula pipelines. Meanwhile, the Dos Bocas refinery has started operations and is ramping up production and natural gas needs.
Among the natural gas power projects in development in Mexico are the Mérida, Valladolid, Tuxpan, Baja California Sur, San Luis Río Colorado and González Ortega combined-cycle plants.
Most of the marketed natural gas in Mexico originates in the United States.
Cross-border flows have already hit records this year as industrial and power demand rises. Mexico imported 6.946 Bcf on Tuesday via pipeline from the United States. South Texas (4.673 Bcf) and West Texas (1.649 Bcf) were the main supply regions.
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