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Researched by Industrial Info Resources (Sugar Land, Texas)--As the U.S. presidential election draws near and the candidates' positions on hydrocarbons are divided along party lines, the future of cross-border pipelines, which fall directly under the president's jurisdiction, hangs in the balance. From an economic standpoint, however, no pipeline will be built without the economics to support it, whether suppliers to fill the line or users to pull from it.
Power producers represent a large chunk--roughly one-third--of total natural gas demand in North America. Thus it stands to reason that where new gas power stations are needed and planned, pipelines will spring up, and vice versa as new power stations can rest assured of a steady supply of gas to feed their boilers. A slew of new natural gas-fired power plants in Mexico means new demand for natural gas, which is most likely to come from the U.S., with its neighboring Permian Basin and Eagle Ford shale plays, until Mexico's own reserves can be tapped.
There are multiple such power projects near the U.S.-Mexico border that are planned to come online between now and as far out as 2023. Industrial Info is currently tracking 2,750 megawatts (MW) of natural gas-fired power generation capacity right on the border. One of the largest projects planned is among these, the new 924-MW combined-cycle plant in Ciudad Juarez, Mexico, by Abengoa Mexico SA de CV (Mexico City, Mexico).
Traveling a bit further into Mexico, expanding the view to encompass the entirety of the Mexican states that have a border with the U.S., there are 9,813 MW of new capacity to be added, worth $10.9 billion. Over the next three years, this breaks down to $1.3 billion being completed in 2016, representing roughly 1,180 MW, another $2.1 billion representing 1,750 MW in 2017, and a further $1.3 billion and 1,920 MW in 2018, with the remainder of completion between 2019 and 2023.
To serve this growing demand, the U.S. has several huge pipelines planned to send natural gas into Mexico, worth a total of $2.5 billion. Under construction currently is the Roadrunner Gas Transmission project by ONEOK Partners LP (NYSE:OKS) (Tulsa, Oklahoma), which is scheduled to carry up to 875 million cubic feet per day (MMSCFD) of gas from west Texas, to Chihuahua, Mexico. Likewise, the Trans-Pecos pipeline project by Energy Transfer Partners LP (NYSE:ETP) (Dallas, Texas) is currently being constructed and will be able to transport up to 1.35 billion cubic feet per day across the border. Both of these projects are set for completion in 2017, set to serve the aforementioned 3,000-plus MW of new gas-fired power capacity scheduled to come online between now and then.
Further gas pipeline projects in the works are expected to provide up to another 1 billion cubic feet per day to Mexico in 2018. However, with so much power capacity set to come online well into 2023, there may yet be opportunity for more border-crossing pipelines, meaning more markets for Texas gas, and even potentially a much-needed price boost for Marcellus producers.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Power producers represent a large chunk--roughly one-third--of total natural gas demand in North America. Thus it stands to reason that where new gas power stations are needed and planned, pipelines will spring up, and vice versa as new power stations can rest assured of a steady supply of gas to feed their boilers. A slew of new natural gas-fired power plants in Mexico means new demand for natural gas, which is most likely to come from the U.S., with its neighboring Permian Basin and Eagle Ford shale plays, until Mexico's own reserves can be tapped.
There are multiple such power projects near the U.S.-Mexico border that are planned to come online between now and as far out as 2023. Industrial Info is currently tracking 2,750 megawatts (MW) of natural gas-fired power generation capacity right on the border. One of the largest projects planned is among these, the new 924-MW combined-cycle plant in Ciudad Juarez, Mexico, by Abengoa Mexico SA de CV (Mexico City, Mexico).
Traveling a bit further into Mexico, expanding the view to encompass the entirety of the Mexican states that have a border with the U.S., there are 9,813 MW of new capacity to be added, worth $10.9 billion. Over the next three years, this breaks down to $1.3 billion being completed in 2016, representing roughly 1,180 MW, another $2.1 billion representing 1,750 MW in 2017, and a further $1.3 billion and 1,920 MW in 2018, with the remainder of completion between 2019 and 2023.
To serve this growing demand, the U.S. has several huge pipelines planned to send natural gas into Mexico, worth a total of $2.5 billion. Under construction currently is the Roadrunner Gas Transmission project by ONEOK Partners LP (NYSE:OKS) (Tulsa, Oklahoma), which is scheduled to carry up to 875 million cubic feet per day (MMSCFD) of gas from west Texas, to Chihuahua, Mexico. Likewise, the Trans-Pecos pipeline project by Energy Transfer Partners LP (NYSE:ETP) (Dallas, Texas) is currently being constructed and will be able to transport up to 1.35 billion cubic feet per day across the border. Both of these projects are set for completion in 2017, set to serve the aforementioned 3,000-plus MW of new gas-fired power capacity scheduled to come online between now and then.
Further gas pipeline projects in the works are expected to provide up to another 1 billion cubic feet per day to Mexico in 2018. However, with so much power capacity set to come online well into 2023, there may yet be opportunity for more border-crossing pipelines, meaning more markets for Texas gas, and even potentially a much-needed price boost for Marcellus producers.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
