Mexico has been increasing its use of natural gas for power generation, with several new plants coming online in recent years and at least 10 more expected to be operational by 2026. The U.S. Energy Information Administration (EIA) forecasts an increase in U.S. natural gas pipeline exports to Mexico, as several pipelines in Mexico are expected to become fully operational this year and next. The country meets nearly 70% of its demand for natural gas through imports from the U.S., as Petróleos Mexicanos (Pemex), Mexico’s national oil company, cannot produce enough natural gas to keep pace with demand.

The demand for natural gas in Mexico has primarily been driven by the power generation sector, which has seen a significant increase in demand for electricity across the country. More than 60% of Mexico’s electric capacity additions over the past several years have been natural gas-fired power plants, a trend expected to continue through this decade.

Iberdrola’s Topolobampo III plant is among the largest gas-fired plants to come online recently, using GE Vernova’s 7HA.01 gas turbine technology and supplied by the nearby Topolobampo natural gas pipeline. The plant entered commercial operation in January of this year and features two heat recovery steam generators (HRSGs) supplied by CERREY. The Topolobampo III plant is one of several new gas-fired facilities being built in Mexico, even as the country increases its generation capacity from renewable energy.

Mexico’s domestic production of natural gas has risen in recent years, as have its imports of U.S. gas. The country’s population is expected to grow from about 127 million today to more than 150 million by 2050, and the government plans to more than double renewable energy generation capacity from 15 GW to 40 GW by 2030.

The demand for gas has primarily been from the power generation sector, as demand for electricity across Mexico has increased dramatically. The country’s national energy ministry, known as SENER, said more than 60% of Mexico’s electric capacity additions over the past several years have been natural gas–fired power plants, a trend expected to continue through this decade.

Veronica Irastorza, senior managing director for FTI Consulting, told Infrastructure Brief, “Mexico relies heavily on natural gas as its primary fuel source for electricity generation, accounting for nearly half of its total energy mix. It’s a vital component for numerous industrial operations [iron, steel, glass, and petrochemicals to name a few]. Despite a modest uptick in local production in 2022 following a period of decline, Mexico still imports mostly from the U.S. around 90% of its natural gas [or 70% if we include Pemex’s reinjections and flaring]. U.S. natural gas exports to Mexico will continue to grow over the coming decade.”

Irastorza said, “Thanks to the shale gas revolution and a robust market, the U.S. has enjoyed some of the most competitive natural gas prices in the world for years, benefiting the whole region, including Mexico. Over the past five years, pipeline infrastructure facilitating the transportation of U.S. gas to Mexico has doubled. In the next few years, the Mexican government expects to add about 6,000 MW of combined cycles that will use natural gas. In addition, several companies are developing [LNG] export projects in Mexico to export U.S. gas to Europe and Asia. Two of these plants are already under construction [New Fortress in Tamaulipas and Sempra’s Costa Azul in Baja]. A third one, Saguardo Energia, is also moving forward.”