Mexico’s government is rushing negotiations with private companies to double its strategic natural gas storage capacity earlier than planned, fearing that Donald Trump could use the Latin American country’s heavy dependence on the fuel as leverage in negotiations, three sources familiar with the matter said.
Mexico, a net importer of natural gas, has storage capacity of 2.4 days in facilities designed for off-take operations.
The plan is to increase storage capacity to at least five days of national consumption in appropriate facilities such as salt caverns and depleted fields, two government sources and one industry source said.
By comparison, countries such as France have average natural gas storage equivalent to just over 105 days of their national consumption and others, such as Spain, have about 20 days.
The initial plan of President Claudia Sheinbaum’s government was to double storage capacity by 2030, when her administration ends. However, Trump’s rise to power and more extreme weather forced it to move up the plan to late 2025 or, at the latest, early 2026, the sources said.
A White House official, asked about the possibility of using Mexico’s dependence on U.S. natural gas as leverage, said the Trump administration is still reviewing its trade relationship with Mexico but that “all options” remain on the table.
Mexico’s energy ministry did not immediately respond to a request for comment from Reuters.
“With Trump in the (U.S.) presidency, it is a very high risk that something similar to what happened in 2021 with the gas coming from Texas could happen,” said one of the Mexican government sources.
In February 2021, a winter storm in Texas cut off natural gas supplies via pipelines to Mexico, leaving millions of users without electricity across most of the country and accumulating losses of just over $6 billion in one week, according to private estimates.
Imports – almost entirely from the United States – supply 72 percent of the total demand for natural gas consumed in Mexico. The fuel is used mostly to generate electricity and for industrial activities. The vast majority of natural gas imports are made by pipeline and only a fraction by sea.
Since Sheinbaum won the presidency of Mexico in the middle of last year, her energy team has met with Mexican and foreign businessmen to resume the plan of her predecessor and ally, Andrés Manuel López Obrador, to increase natural gas storage capacity for emergencies.
And, once they learned that Trump would return to the White House after winning the November elections, the authorities have shown their concern, especially after the Republican’s threats to impose tariffs on Mexico if it does not stop the flow of drugs and migrants to the north and after an unusual cold wave in Texas intensified by the La Niña phenomenon.
“They are worried (in the Mexican government),” said one of the sources from the business sector who has participated in at least two meetings with officials. “They fear that Trump could use the supply (of natural gas) as a coercive measure.”
Long-standing policy
The storage of natural gas for energy security is a policy that Mexico has sought to implement for more than a decade, when fuel imports began to skyrocket, going from 1,258 million cubic feet per day (mmpcd) in 2009 to 6,178.6 mmpcd in 2023, amid a drop in local hydrocarbon production.
In 2018, the Energy Secretariat presented a document instructing the natural gas transportation and storage system manager, Cenagas, to have a minimum of five days of national consumption as a strategic natural gas inventory – 45 trillion cubic feet (Tcf) – by 2026.
However, the previous government failed to attract bidders for the tenders to transform four depleted oil fields into storage facilities.
According to sources, the capital cost needed to double natural gas storage capacity would be between $420 million and $2.58 billion, depending on the technology used.
The lower limit corresponds to depleted hydrocarbon fields and the upper limit corresponds to storage in Liquefied Natural Gas tanks.
Source: jornada
