Agustin Humann Adame, AMGN
Release Date: 0000-00-00
In the time that we have been here we haven’t heard much about the gas industry so can you please give our readers a brief overview of the sector.The gas sector has been growing in the last 10 or 15 years, mainly because it is used to generate electricity and is increasing nowadays .some industries that were using fuel oil; now are changing to natural gas. Moreover, since the middle of the last year with the discovery of Shale gas in the United States, we´ve been looking at an increase in the demand of natural gas. Under these circumstances, PEMEX announced recently the discovery of a Shale gas fields we expect more and more growth in the request of natural gas in Mexico.As you know, today we have two plants of liquefied natural gas and there is one more still in construction. There are two projects: one in Lazaro Cardenas and the other in Yucatan. With these developments, we will have five plants of liquefied natural gas in the near future.
As you mention there are two plants of LNG under construction one of them is in the Port of Manzanillo that started in 2008 and it is expected to come online mid this year. Can you comment on the evolution of the project?
Indeed it is expected to be finished the second one in the half of this year. Up to day the advance of the construction of the plant is on time, we do not visualize any problem on this subject
What is the economic impact that the natural gas sector has in Mexico - in terms of investment or employment for example?
We have now, around $7.5 billion in the industry: in transport, storage and distribution systems. However, there is a huge market to make it grow because we have all the distribution in the north and central part of the country; we have the entire south zone of the country without any infrastructure.
When we interviewed you a few years ago you told our colleagues that you were convinced that the new government of Calderon will push for the exploration and processing of natural gas. What have been the major achievements within Calderon government?
The main activity is that there were changes under PEMEX concerning: its structure as well, and as a new way to make some contracts for the participation of the private sector. What is very important is that the budget of PEMEX now allows investments to be approved by their own board. These give the possibilities of an important participation of the private sector, therefore in the next three or four years, we can expect important investments on the energy sector.
On that note, what do you think is going to be the impact for the incentive contracts for the gas industry and is there any fear because I understand the multiple contracts in the gas industry were not that successful?
Incentive contracts will certainly give more benefits. With the “Multiple Service Contracts”, companies were just receiving payments for expenses that were coming, within a little fee. They did not have anything else to make the wells more successful and increase production.
What are the challenges that the gas sector is facing today?
The first would be foreign government allowances of the LPG gas, because its creates unfair competition. The price of the LPG is supposed to be ruled under our laws that natural gas and LPG cost of opportunity should be related to the one, in the United States. But it is applied only to natural gas but not LPG at all. The reason that government says, is because of 80 percent of domestic consumers use LPG since there is no restriction to give natural gas. So we are trying that the government remove the practice of administrate the retail price of LPG, and apply the same criteria to define the retail price at least in the regions where natural gas distribution systems are already in operation, it is established by the law and create real competition.However the benefits of LPG is a considerable problem for our industry, I believe that the principal one is the slow growth of the natural gas distribution system mainly because of the lack of proper infrastructure of natural gas pipelines to carry it to cities where it doesn´t exist. As I said in the beginning of the interview the North of Mexico is a part of the country that uses more natural gas, however we need to develop its market penetration in the South since it is minimum As you know natural gas has a lot of advantages: for exampleIt is cheaper and cleaner; you pay for it after you have used it. That is why we are pushing the private sector to invest in more infrastructures for natural gas.
As you mention there is not much investment in infrastructure. Why? Is it difficult to incorporate investment here in Mexico?
You have just “put the finger on the scar”. The main problem is; we have to charge for transportation. In Mexico, very different to other countries, we do not have the stamp tariff (rolled in) although we are expecting to have it in a close future. In Mexico as today, the projects to build a gas pipeline have to be tied with the consumer, since they have to take more than 80 percent of the capacity of that pipeline in order to guarantee the return of the investment. To come back to stamp tariffs Comision Reguladora de Energia ( CRE) had made advances about it.. They´ve already divided the country into five big zones in order to have five stamps. And they are now using one of the pipelines in the north near Matamoros in the state of Tamaulipas. It is the first one that has applied this rolled in tariff. And they will make some adjustments from that to open the market. Once the market is opened, I am sure the investors are going to be participating in the construction of the infrastructure.
While crude oil production at the Cantarell field has fallen in recent years, natural gas production has risen dramatically in the field. However, the increase in natural gas production at Cantarell has also led to an increase in natural gas flaring. What has the industry suggested in order to take advantage of this growth while decreasing the gas flaring?
PEMEX Gas has invested a lot of money to stop burning natural gas but not enough. The last information that I have is that they were burning 17 percent of the Mexican production of natural gas. That number is the equivalent to the present natural gas imports. So they have to build the infrastructure to connect those fields to the natural gas pipeline and avoid the flaring. If they opened the opportunity for us to invest in those pipelines, and pay us a fee for using our pipeline, we could do it and be eager to help in diminishing the current amounts of natural gas burning.
You have been in the industry a long time. You were appointed the CEO of the association in 2005. What have been the priorities of the association since you took over?
We have been promoting the use of natural gas. We have been participating with the regulators to make some adjustments to the regulations, focusing the attention in the way that they define the tariffs they authorize to the investors of the private sector, in transport, in storage and in the distribution systems. Also we have been stimulating projects for natural gas vehicles. And now we are working in projects to use compressed natural gas and transport it in bigger trucks for some cities where they do not have today any pipeline .This way we are able to develop in new regions to use natural gas for industries, commerce’s, domestic and vehicle consumption. As the CEO of the association what is your commitment with the natural gas sector?
My commitment is to increase the use of natural gas in the whole country.
Today what is the importance of natural gas in Mexico s energy basket?
In the overall energy basket, not only in the industries, it is about 30 percent. Regarding domestic usage (in the areas there is the proper infrastructure) is about 10 percent What is your future outlook for the natural gas sector?
There are huge opportunities and we are sure they will be very interesting investments opportunities in the near future.
What would you like your final message to be to our readers?
Keep a close eye in the Mexican gas sector since we are sure our country is going to offer more opportunities to invest money in this raising sector.
| Company: | AMGN |
| Position: | President |
| Country: | 墨西哥 |