VIEW FROM THE TOP
PROVIDING MEXICO’S GAS SECURITY DAVID MADERO Director General of CENAGAS
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Q: What steps must CENAGAS take to move forward and
Q: How do you maintain a positive balance sheet and
what are its top priorities?
what are the main challenges you perceive in the market?
A: We have been operating since August 2014 and have
A: Our ultimate objective is to provide gas security to
grown to over 350 employees, with a focus on recruiting
the country and we are well under way. We are aware
young talent. We remained profitable in our first two
that private companies will eventually earn larger shares
years of operation, providing a dividend to the federal
of the market so we need to carry out the projects we
government while maintaining our own capitalization
deem necessary, with an eye to budget control and
of around MX$1.7 billion. We want to build a strong
cost-reduction practices. A few years back, critical
balance sheet that will enable us to raise investments in
alerts on natural gas supply were the main concern due
proportion to our income and to have a solid portfolio of
to the lack of infrastructure growth, which changed
assets. On the operational side, we have already signed
after the implementation of the Los Ramones pipeline
four contracts under the new regulatory framework and
project. Now, challenges are related to the drop in local
we are about to sign another for pipeline operation and
production that lead to more natural gas imports as we
maintenance that will come into effect in 2018.
are reaching our import-capacity limit.
CENAGAS’ Five-Year Plan 2015-2019 looks to provide Mexico with 12 natural gas pipelines, totaling 5,159km and an estimated investment of US$9.8 billion
On the positive side, there are many pipelines being built right now and they are close to starting commercial operations. Once this happens, we will enter an era of larger transportation capacity than demand, which will be good for gas security but financially challenging for transportation companies. We are aware that the best way to cope with these challenges is to raise the availability of natural gas so more consumers are connected to the pipeline.
We are also on our way to maturity as a TSO through
Q: What factors contribute to a positive supply-demand
contract renewals, maintaining our contract-signing
balance and where do your main customers come from?
pace and being involved in the first tender for storage
A: The first thing that must be done is to boost demand
capacity this year. The natural gas industry has
for natural gas and power generation capacity in Mexico.
progressed in transportation since molecule prices
The local price of natural gas has fallen in comparison to
were deregulated and this has incentivized operations.
other fuels, mainly driven by international prices, which
We still have challenges ahead, such as reaching our
has made it more desirable to connect to the pipeline.
strategic objectives and growing to become even more
There are still many auxiliary costs and this remains a
independent of PEMEX. We also need to finish our
challenge. When it comes to our customer breakdown,
information and operational technology projects, but we
40 percent comes from power generation, 20 percent
believe we are on the right track moving forward.
from the oil and gas industry and 40 percent comes from industrials and local distribution companies, which has traditionally grown more slowly but it is in a better position
CENAGAS , created in 2014, is a decentralized organism that
now thanks to regulations from CRE. CENAGAS has always
plays two roles: manager of the Natural Gas Integrated National
been a customer-oriented institution and we value their
Transportation
satisfaction over any other thing. We want clients to have
and
Storage
System
operator and procurer of its own pipelines
(SISTRANGAS)
and
the best quality standards and good consumption systems.