Fitch Ratings has indicated that Mexico's dependence on gas from the United States via pipelines will continue to increase, despite trade tensions created by tariffs imposed by Donald Trump. The reliability and cost-effectiveness of importing gas from the U.S. have been highlighted as key factors for Mexico, although the country's exposure to exchange rate volatility and potential supply disruptions is also noted.
The growing demand for U.S. gas is based on limited domestic production and the expansion of infrastructure through new pipeline projects. The connectivity of infrastructure between Mexico and the U.S. facilitates the efficient flow of natural gas through an extensive network of pipelines. On the other hand, the development of new power plants, such as the Southeast Gate project managed by CFE, is expected to further boost the demand for natural gas in the country in the coming years.
Fitch Ratings details that natural gas represents the majority of electricity generation in Mexico, with more than 70% imported from the U.S. A sudden increase in the prices of imported gas could negatively affect CFE, the Mexican government which subsidizes certain sectors, and industrial and commercial users.
Regarding the Southeast Gate project, developed by TC Energy Corporation and CFE, it is a 715-kilometer pipeline that combines land and underwater sections, connecting southern Tuxpan with Coatzacoalcos and Paraíso Tabasco through the Gulf of Mexico. It is projected to be operational by mid-2025 and will transport a large amount of natural gas daily, interconnecting with other strategic projects to benefit the Mexican industry.
