Since the onset of the coronavirus disease 2019 (COVID-19) pandemic, natural gas consumption in Mexico has declined. Natural gas is consumed in Mexico primarily in the power and industrial sectors. Social distancing measures and a decline in tourism reduced natural gas consumption across these sectors. According to natural gas pipeline flow data provided by Genscape, Inc. (a Wood Mackenzie business), total natural gas consumption in Mexico averaged 8.2 billion cubic feet per day (Bcf/d) in April–July of this year, 5% (0.5 Bcf/d) lower than during the same period last year, as lockdown measures and general economic slowdown reduced consumption, particularly in the power generation sector. Total supply averaged 8.0 Bcf/d, 6% (0.5 Bcf/d) lower than during the same period last year, with the largest year-on-year decline in imports of liquefied natural gas (LNG) over this period.
Consumption. The largest reductions in natural gas consumption in Mexico occurred in May 2020, when consumption across all sectors averaged 7.8 Bcf/d, 10% (0.9 Bcf/d) lower than in May 2019. The largest decline was in natural gas consumption by natural gas-fired power plants, averaging 14% (0.6 Bcf/d) lower. The electric generation load across all of Mexico declined by 11% in May 2020 (3.1 terawatthours (TWh)) compared to May 2019 as Mexico implemented lockdown measures to contain the spread of COVID-19. A large portion of electricity demand in Mexico is generated by the tourism industry, which contributes 17% to Mexico’s gross domestic product (GDP). The reduction in trade, tourism, and other economic activities led to a significant reduction in overall electricity demand, which declined by 7.4 TWh (7%) in April–July 2020 compared to the same period in 2019. Industrial sector consumption also declined in April–June 2020, averaging 5% lower than during the same period last year, but it has begun to gradually recover since July.
Supply. Domestic production of natural gas in Mexico has not been significantly affected by the COVID-19 pandemic. The largest decline in Mexico’s natural gas supply mix was in LNG imports, which have declined every month since March 2020 despite all-time historical low global LNG prices. In particular, LNG imports declined at the Manzanillo LNG terminal on the west coast of Mexico, which supplies LNG to Mexico City and Guadalajara, two of Mexico’s largest metropolitan areas. Both Mexico City and Guadalajara historically depended on LNG imports from Manzanillo terminal to meet some of their natural gas supply requirements. Since commissioning several pipelines of the Wahalajara pipeline system, which connects natural gas supply from the Waha area in the United States to Mexico’s central and western regions, pipeline imports have begun to displace LNG imports at Manzanillo terminal. LNG imports at Mexico’s LNG terminal on the east coast—Altamira—have been largely displaced by pipeline imports from the United States since October 2019 following the commissioning of the Sur de Texas-Tuxpan pipeline in September 2019. Altamira terminal had no LNG imports from November 2019 to April 2020 and imported only 3 cargoes since then (in May, June, and August).
