The United States later this summer will add close to 10% to its natural gas export capacity to Mexico following the June 14 approval of a 0.37 billion cubic feet per day (Bcf/d) pipeline that crosses the border at a point in far western Texas. The Federal Energy Regulatory Commission approved a request by Kinder Morgan's El Paso Natural Gas Co. to begin operations on the export pipeline that crosses the border from El Paso County, Texas.
Norte Crossing is one of several natural gas pipeline export projects planned through the end of 2014, which together could add up to 3.3 Bcf/d of additional export capacity to Mexico—almost doubling the 2012 U.S. export capacity to Mexico of 3.8 Bcf/d. U.S. exports of natural gas to Mexico have increased by 0.34 Bcf/d from March 2012 to March 2013, and now average 1.81 Bcf/d. The highest year-on-year increases in monthly export volumes to Mexico between 2012 and 2013 have come from three pipeline crossings immediately to the south of the Eagle Ford Shale play in the Western Gulf Basin of South Texas. The Norte Crossing differs in that it is located in the Permian Basin in West Texas.
Mexico has increasingly relied on pipeline gas imported from the United States because its natural gas consumption has risen faster than production. Much of the increased consumption is the result of the country's plans to add 28 gigawatts of new electric generating capacity between 2012 and 2027. Norte Crossing will interconnect with the 0.85 Bcf/d Chihuahua Corridor pipeline in Mexico, scheduled for completion this summer, according to Mexican government reports. This corridor will increase natural gas supply to electric generation facilities in Chihuahua and the neighboring states of Durango and Coahuila.
Natural gas prices rose over the report week at most locations. The Henry Hub spot price increased from $3.74 last Wednesday to $3.93 yesterday, reversing some of the declines from previous weeks. Prices increased across most of the country, likely in response to forecasts for hot weather. Increases were particularly large in the Northeast, with large gains in trading Tuesday. The price at the Algonquin Citygate, which serves Boston, rose $0.24 to $3.97 per MMBtu. Similarly, prices at Transcontinental Pipeline's Zone 6 trading point for delivery into New York City rose $0.25 per MMBtu the same day. The Northeast is a major consumer of natural gas for power generation, and their consumption this week was about 2.4% greater than the previous week, with particularly high use on Monday and Tuesday, according to data from Bentek Energy Services.