Liquefied natural gas exports tend to get all the headlines, but U.S. pipeline exports of natural gas to Mexico are at an all time high. Pipeline exports have actually more than tripled over the last decade. There is a problem, though. As Reuters reported on August 10, exports could grow even more but growth is being delayed by pipeline constraints that were expected to have been eased by now.
In August, exports hit 4.9 billion cubic feet per day (bcf/d), but by the end of the year pipeline capacity is supposed to reach 13.5 bcf/d. In fact, right now Mexico is the leading buyer of more expensive U.S. liquefied natural gas, taking around 19% of America’s exports. Most of those LNG shipments will eventually be replaced by pipeline deliveries. Earlier this year, Platts reported that there are nine major gas pipelines under construction to Mexico, but each has faced an average delay of over 400 days. Most of the delays are blamed on legal issues, but those delays are expected to be mere hiccups in the long run. The projects in the works already are expected to be finished eventually, so export records should be broken again and again in the coming months and years.
You might think that gas from Appalachia has nothing to do with gas going to Mexico, and indeed a lot of the gas directly moving to Mexico is being produced in Texas and New Mexico. Were it not for the Marcellus shale formation and the massive increase in production from Appalachia however, that gas from Texas and New Mexico might have headed up the East Coast of the United States. Instead, gas from Pennsylvania, Ohio, and West Virginia is serving most of the East Coast and even being routed down to export facilities on the Gulf Coast.
Cimmaron Land is a leading expert on land use in Appalachia, and you can contact us today to learn more about opportunities in the region.