The Mexico Natural Gas Market is projected to register a strong CAGR during the forecast period (2026-2031).
According to EIA, U.S. natural gas pipeline exports to Mexico averaged 7.5 billion cubic feet per day (Bcf/d) in May 2025, the most of any month on record, as Mexico’s demand for natural gas, particularly in the electric power sector, increases. Mexico’s domestic supply remains insufficient, reinforcing reliance on U.S. pipeline imports. Infrastructure constraints and limited storage capacity continue shaping market vulnerability and investment requirements.
The natural gas market in Mexico is primarily dependent on the importation of gas via pipelines from the United States, as there will be about 10.849 million cubic feet of this gas imported into Mexico in 2025, which provides an uninterrupted flow of gas to meet the needs of power generation and industry.
The higher prices for LNG will have a significant impact on the economics of importing natural gas to Mexico. According to EIA, the average price of LNG for imports is forecasted to rise from $5.80 per MCF in 2024 to $6.73 per MCF in 2025. This trend will affect Mexico’s cost of procuring additional LNG and will also influence the way contracts are negotiated to provide LNG to Mexico.
The price of pipeline gas imported from the United States is increasing rapidly in response to global increases in natural gas prices. The average price of pipeline gas from the U.S. is expected to increase from $1.81 per MMBtu in 2024 to $2.75 per MMBtu in 2025 based on cross-border electricity trade tracking. Consequently, the increase in the price of imported pipeline gas will put additional pressure on both the margins associated with the purchase of pipeline gas by power generators and manufacturers in Mexico, which rely on the importation of at least 70% of their total volume of gas from the U.S.
There continues to be a significant market opportunity in the expansion of both pipeline and underground storage infrastructure in Mexico, especially with the development of the SISTRANGAS system, which is being led by CENAGAS. Presently, Mexico has only limited underground storage capacity available to it, on the order of days of supply available to meet domestic demand, and the government has backed several initiatives to expand underground storage and to improve the efficiency of the north-to-south transmission of natural gas throughout Mexico. Ongoing investment in natural gas infrastructure will enhance the long-term resilience of this infrastructure.
According to SENER 2025 energy balance estimates, Mexico's dependence on imported natural gas will exceed 70%, with the majority coming from U.S. sources and transported through the northern border pipeline corridors into Mexico's national transmission line system. Pipeline expansion projects underway will improve Mexico's central/north-to-south corridor connections; for example, the Tula to Villa de Reyes and the Tuxpan to Tula pipelines are both expected to be in service by the end of 2025 and will improve the connectivity of the central/north-south corridor. These projects will also expand Mexico's southern border measurement system for better access to gas fields located in the Yucatan Peninsula with the completion of the Energia Mayakan pipeline. Further, Mexico's reliance on importing LNG through coastal terminals as a secondary source of balance will continue, particularly given the limited storage capacity for only several days of demand before needing to engage in cross-border pipeline flows for replacement needs.
With current U.S.-related constraints resulting from the ongoing U.S.-Iran war, the price of natural gas linked to U.S. benchmarks rose nearly 7% from February to March 2025, increasing Mexico's import economics and the costs to procure gas for electricity generation and industrial users.
Regulation Area | Impact |
Hydrocarbons Sector Law (LSH) 2025 | Centralizes regulatory authority under SENER, strengthening state control, prioritizing PEMEX, and limiting private participation flexibility across upstream and midstream activities. |
Energy Sector Institutional Reform | Reduces independent regulatory bodies, increasing centralized planning efficiency but raising uncertainty for private investment and contract approval timelines. |
CENAGAS SISTRANGAS Operational Framework | Strengthens national gas transport coordination, improving pipeline allocation efficiency but highlighting bottlenecks and dependency risks in cross-border supply integration systems. |
March 2026: The U.S. Department of Energy confirmed in 2026 an extension for LNG export commencement from the Energía Costa Azul project, ensuring continued progress toward the startup of liquefaction operations. This regulatory approval supports completion timelines and reinforces cross-border U.S.–Mexico gas integration under long-term export authorisations.
August 2025: Sempra Infrastructure, a subsidiary of Sempra, and EQT Corporation signed a 20-year Sales and Purchase Agreement (SPA) for the supply of 2 million tonnes per annum (Mtpa) of LNG from the Port Arthur LNG Phase 2 project in Texas, with pricing indexed to Henry Hub and delivery on a free-on-board basis. According to official company disclosures, this long-term contract strengthens North American LNG commercialisation, reinforcing cross-border gas integration that directly supports Mexico’s LNG-linked infrastructure and regional energy trade flows through integrated U.S.–Mexico gas systems.
As stated by CENAGAS in its 2025 operational disclosure, the majority of the country’s gas infrastructure is based on the CENAGAS-operated (Mexico's National Gas Pipeline Transmission System) SISTRANGAS system, which accounted for approximately 60% of the total flows of gas delivered within Mexico. This national system is comprised of several cross-border routes connected to various compression stations and many inland corridors being used as pipeline transmission routes; nearly 32 billion MXN in capital commitment is planned for pipeline expansion and maintenance of the system (CENAGAS estimate) for the 2023-2030 timeframe.
Mexico's natural gas market is being driven by the use of natural gas to generate electricity; currently, approximately 56% of the total consumption of natural gas in Mexico is in the generation of electricity. There is continued structural strength in the industrial sector (manufacturing and refining) and stable residential and commercial consumers; however, transportation has limited use as it is primarily focused on niche applications of compressed natural gas ("CNG").
Mexico’s gas flows are structurally reliant upon interconnections of gas pipelines with the United States, with northern entry points supplying more than 70% of all gas consumed in Mexico (SENER). Gas is transported from the Texas border into central demand nodes via the SISTRANGAS gas system; however, there are significant limitations in the northern part of the country due to limited reverse flow capabilities and limited gas storage capacity for southern regions.
Petróleos Mexicanos (PEMEX)
Comisión Federal de Electricidad (CFE)
CENAGAS
TC Energy
Kinder Morgan
Sempra Infrastructure
ENGIE México
Naturgy Energy Group
BP Energy México
Shell Energy North America (Mexico operations)
Grupo Carso (Carso Energy)
With operations stretching across the Upstream natural gas sector, PEMEX is the state-owned operator of oil and gas in Mexico, producing natural gas, particularly associated gas from oil fields like Ixachi and Burgos. Within the CNH's regulating guidelines, PEMEX is currently the leading producer in Mexico (from the 2025 Operating Plan). As a result, through its operational presence in both upstream gas production and full development of upstream basins, PEMEX continues to strengthen the supply security for Mexico, provide development programs that utilise natural gas from upstream basins, and also continues its activities to recover this gas through all potential avenues.
CENAGAS has been tasked with operating the national gas transportation system (SISTRANGAS) and its associated resources, including the ability to maintain the balancing of supply versus demand between each route within SISTRANGAS, the ability to allocate capacity within SISTRANGAS, and the integrity of the pipeline system within SISTRANGAS. According to system operations reports issued by CENAGAS, they have a substantial percentage of internal gas flows, are implementing a multi-year expansion of both pipeline systems and associated infrastructure (2025-2030), and are increasing the reliability of gas transmission through reducing bottlenecks as well as providing a more consistent supply of gas between different regions of the country.
Sempra Infrastructure develops and operates major natural gas infrastructure projects in Mexico, including pipelines and LNG export/import-related natural gas infrastructure (e.g., Energía Costa Azul). According to the company's filings and other reports, Sempra Infrastructure has a substantial investment in various natural gas infrastructure projects throughout North America, including LNG and pipeline infrastructure located within Mexico, contributing to the North American gas trade and enhancing the integrated energy security of the U.S. with Mexico.
Mexico’s gas market remains structurally import-dependent, anchored to U.S. pipeline supply. Limited domestic production and storage constraints sustain pricing sensitivity, while infrastructure expansion gradually improves long-term energy security and regional integration.
| Report Metric | Details |
|---|---|
| Forecast Unit | USD Billion |
| Growth Rate | Ask for a sample |
| Study Period | 2021 to 2031 |
| Historical Data | 2021 to 2024 |
| Base Year | 2025 |
| Forecast Period | 2026 – 2031 |
| Segmentation | INFRASTRUCTURE, PIPELINE NETWORK, APPLICATION, MEXICO NATURAL GAS MAJOR IMPORTING COUNTRIES |
| Companies |
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