Mexican Natural Gas Industry Needs To Be On Same Page for Success — Column

Editor’s Note: NGI’s Mexico Gas Price Index, a leader tracking Mexico natural gas market reform, is offering the following column by Eduardo Prud’homme as part of a regular series on understanding this process.

In the first weeks of her administration, President Claudia Sheinbaum has repeatedly promised certainty to the investment community. Her central message has been that her government would be committed to guaranteeing legal security for foreign and private investment projects, especially in key sectors such as energy. In this sense, she has sought to differentiate herself from the policies of her predecessor, Andrés Manuel López Obrador.

However, there has still been no energy policy put in place that would clarify the opportunities and risks that investors could face. The Mexican natural gas system works with relative stability, but it is close to reaching certain critical limits that would make the continuity of supply difficult. Infrastructure companies have kept proposing projects, but the scale of these have ben much less ambitious than a decade ago. It is not easy to estimate expected returns on projects when the Comisión Reguladora de Energia (CRE) is basically already a part of the Energy Ministry (Sener) and regulatory decisions have become political. Meanwhile, there has been a lot of litigation as private sector companies have found their work complicated by new rules.