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Lopez Obrador pledges to solve power, gas challenges on Mexico's Yucatan Peninsula


Industrial users concerned about short-term situation

Government decisions to cancel FRSU LNG project worsen supply challenges

1.5 GW of renewables under development may ease situation

  • Author
  • Daniel Rodriguez    Rocco Canonica
  • Editor
  • Jim Magill
  • Commodity
  • Electric Power LNG Natural Gas

Power customers reported another blackout on the Yucatan Peninsula Sunday, a day after President Andres Manuel Lopez Obrador promised to ensure reliable gas supply in the region as well as build a generation plant.

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"We are providing all our support to solve the natural gas shortage, which is the source problem behind blackouts," Lopez Obrador said Saturday in a webcast event in Yucatan. "I pledge to have enough gas in [Mexico's] southeast region and all of the Yucatan Peninsula."

The president also said he gave an order to state-owned power utility CFE to build a power plant in the region to ensure an end to blackouts on the Peninsula.

The administration has not released details about the new power plant, nor how it will ensure gas supply into the region, which is under an operative emergency by Mexico's electric grid operator Cenace.

On Sunday evening, users of social media reported intermittent blackouts in several neighborhoods in Merida, Yucatan. This happened as local temperatures reached above 40 degrees Celsius (104 F).

CFE did not respond to requests for confirmation of the current situation on the Peninsula, the presidential announcement, or to the veracity of blackouts reported by end-users.


The situation is worrisome, said Alberto Xacur, the regional representative for Yucatan of Mexico's National Industrial Transformation Chamber, known as Canacintra, said on Monday in a statement.

"The announcements made by President Lopez Obrador] are good for the sector, but these are not immediate solutions," Xacur said. "We are still worried because of the high temperatures in the coming months."

Xacur said the presidential announcement would translate into support to advance the interconnection between Engie's Mayakan pipeline system and state-owned independent system operator Cenagas' Sistrangas network.

The region is currently supplied by Pemex's natural gas production in Southern Mexico. However, output from the state oil company has fallen in recent years amid budget constraints and natural production declines in aging fields.

"Our concerns remain, and we urge CFE to look closely that state power plants have enough fuel supply," Xacur said.

Mexico's electric grid operator is preparing for potential supply rationing, brownouts or even blackouts on the Yucatan Peninsula this summer as the region's gas shortage reaches critical levels, Cenace said in a statement.

Tight fuel supply will require the Yucatan's three combined-cycle power plants to operate at reduced load, potentially resulting in insufficient generating capacity during periods of peak demand.

According to Cenace, electric demand on the Peninsula could reach up to 2,220 MW this summer. Existing connections to Mexico's national power grid allow for the import of up to 1,235 MW.


It is unlikely the Yucatan Peninsula will make it through the summer without more blackouts, Victor Rafael, executive director of the National Solar Energy Association (ANES), told S&P Global Platts on Monday.

"The announcement made of building a new power plant shows they do not understand the root issue of natural gas shortages," Rafel said.

The Lopez Obrador administration in January scrapped a Pemex auction to lease and install a floating and storage regasification unit for LNG in southern Mexico at the Port of Pajaritos in Veracruz state.

"The situation in the peninsula is delicate, and the government worsened the situation by canceling the FRSU tender," he added.

At the time, Pemex said it canceled the project because a higher upstream budget will allow it to produce more gas in the region from new discoveries such as the major onshore discovery Ixachi.

In the medium term, the situation could be eased by the construction of renewable generation projects in the region, Rafael said. "There are major projects under development. However, social problems and aboriginal consultations have stalled them," he said.

"There are many projects in the pipe, which if they were completed, they would ensure supply and lower electricity prices as the region is currently being supplied with diesel," he said.

According to data from Mexico's Energy Regulatory Commission (CRE), there are 24 renewable generation projects soon to begin construction or become operational in the state of Yucatan with a combined 1.5 GW of capacity.

-- Rocco Canonica,

-- Daniel Rodriguez,

-- Edited by Jim Magill,