Access to natural gas, an obstacle to nearshoring in México

Mexico City, July 24, 2023.- If Mexico wants to take advantage of the nearshoring moment, it must increase natural gas production and invest to expand its infrastructure for distribution and storage. Today the country imports 75% of the fuel demanded and its estimated storage capacity is of 2.4 days.¹

“For the arrival of nearshoring in Mexico, we must guarantee competitive access to raw materials and fuels with comprehensive solutions that adapt to the needs of small, medium and large companies. This in turn facilitates and adds to the decarbonization of industries,” said Carlos Boone, Director of Business Intelligence at Énestas.

Data from the Economic Commission for Latin America and the Caribbean (CEPAL) highlights that natural gas is the most consumed fuel in Mexico since 2014 and its share in the energy basket amounts to 48%. The figure is on the rise, driven by demand from the industrial sector.²

However, an analysis by the Mexican Institute for Competitiveness (IMCO) warns that, unlike other countries such as France, Germany or Spain, which have a storage capacity of 98.8, 93.8 or 34.2 days, respectively, Mexico’s is only 2.4 days. This poses a risk to guarantee supply to foreign companies that wish to relocate their production chains to Mexico.

To ensure that the Mexican industrial sector has access to natural gas, domestic companies such as Énestas have developed solutions that allow companies to have competitive access to this energy source at any point in the country, by means of natural gas stations or through competitive prices in pipeline trading. This allows them to be more profitable and competitive.

“Liquefied natural gas (LNG) has become a much more affordable alternative to other energy sources. It allows companies to have access to natural gas anywhere in the country, lowering their costs and contributing to the reduction of the carbon footprint,” confirmed Carlos Boone.

Mexico has a strategic location and trade agreements with more than 46 countries. However, these factors are not enough for us to take advantage of the opportunities and economic spillover of 35 billion dollars that nearshoring could generate.3 In order to be truly attractive as a country, we must solve problems of access to fuels and raw materials, infrastructure and energy security.