Mexico has substantial natural gas resources, a long history of hydrocarbon production, and one of Latin America’s largest energy markets. Yet the defining feature of its modern gas sector is not domestic output. It is the growing flow of low-cost gas from the United States into Mexican power plants, factories, and urban markets.
Mexico is therefore a major energy-producing country whose electricity system and industrial base increasingly depend on imported pipeline gas. New LNG facilities are also turning parts of the country into export routes for U.S. supply.
U.S. Gas Has Become a Foundation of Mexico’s Power System
Pipeline imports from the United States have expanded rapidly because Mexican demand has grown faster than domestic supply. U.S. pipeline exports to Mexico averaged 6.4 billion cubic feet per day in 2024, while Mexican gas consumption reached about 8.6 billion cubic feet per day. In May 2025, cross-border flows reached a monthly record of 7.5 billion cubic feet per day. Most of the recent demand growth has come from electricity generation. [1]
Natural gas supports large combined-cycle plants, can replace fuel oil, and provides firm capacity when wind and solar output is unavailable. This is increasingly important as electricity demand rises in industrial centers.
The relationship is strongest along the Texas border. West and South Texas supplied 91 percent of U.S. pipeline exports to Mexico in 2024. Gas from the Permian Basin enters northwestern and central Mexico, while the South Texas corridor connects with northeastern Mexico and the Gulf Coast. These routes have tied Mexican energy costs closely to U.S. production conditions, pipeline operations, and weather events.
This integration gives Mexico access to abundant supply, but it also creates concentration risk. A severe freeze in Texas, a pipeline interruption, or a policy dispute can quickly affect Mexican generators and industrial users. Gas dependence is therefore not only a question of import volume. It is also a question of how much flexibility Mexico has when its main external source is disrupted.
Domestic Production Remains the Unresolved Side of the Market
Mexico still produces natural gas from offshore and onshore fields, much of it through Pemex. However, mature fields, technical difficulties, underinvestment, and the close connection between gas and oil production have limited growth. Pemex reported natural gas production of roughly 3.6 billion cubic feet per day in 2025, well below total national demand. [2]
The government wants to change that balance. Pemex’s 2025–2030 work plan sets a goal of increasing natural gas production to 5 billion cubic feet per day. It links this target to drilling, major well repairs, and four strategic projects expected to provide more than half of the company’s gas output. The plan also calls for reductions in flaring and fugitive methane emissions. [3]
Fields such as Ixachi in Veracruz are important because they can add non-associated gas that is not dependent on crude oil production. Greater domestic supply could support power generation, fertilizer production, petrochemicals, and industrial heat while reducing exposure to U.S. imports.
Production targets do not automatically become marketable dry gas. New wells require gathering systems, processing capacity, maintenance, and connections to demand centers. Mexico must also control methane leakage and flaring. The central issue is whether it can develop and process new supply at a competitive cost.
Pipeline Expansion Has Moved Faster Than Storage
Mexico’s pipeline map has changed greatly over the past decade. Four main corridors now carry U.S. gas across the border, with combined cross-border capacity of about 14.8 billion cubic feet per day. Yet average utilization remained below half of that capacity in 2024 because the internal network still contains bottlenecks, incomplete links, and regions with limited access. [1]
The Sur de Texas–Tuxpan offshore pipeline brought a major new route to the Gulf Coast. It now connects with the Southeast Gateway system, completed in 2025 to supply new power generation and demand in the Yucatán Peninsula. Other projects around Tula, Villa de Reyes, and the Mayakan system are intended to improve service in central and southeastern Mexico. [1]
The market is geographically uneven. Northern industrial states are close to U.S. supply, while parts of southern Mexico have faced weaker pipeline coverage and more expensive fuels. New connections can lower generation costs and reduce the use of fuel oil or diesel.
Storage remains the larger weakness. Mexico has very limited ability to hold gas for emergencies or seasonal demand. The system generally depends on continuous pipeline delivery, which leaves little protection when supply is interrupted. Building strategic storage in depleted fields, salt caverns, or LNG facilities would improve resilience, but these projects require regulation, long-term contracts, and clear payment mechanisms.
Mexico Is Also Becoming an LNG Export Route
Mexico’s gas relationship with the United States is no longer limited to domestic consumption. LNG export projects are beginning to use Mexican coastlines as access points to global markets.
Fast LNG Altamira shipped Mexico’s first LNG export cargo in August 2024. Additional capacity has been under development at Altamira and at Energía Costa Azul in Baja California. These projects mainly rely on gas imported from the United States rather than on a large increase in Mexican production. [1]
The commercial logic is geographic. Pacific terminals can reach Asian buyers without using the Panama Canal, while Gulf Coast facilities connect directly with Texas supply. Mexico can capture construction, service, and port activity even when the gas originates north of the border.
LNG exports may increase pipeline use and attract capital, but they do not improve Mexican energy self-sufficiency. They may also compete for capacity during strong domestic demand. Their value will depend on supply contracts, local infrastructure, and the economic activity retained in Mexico.
Gas Will Remain Central to Mexico’s Energy Transition
Mexico is expanding renewable generation, but current power planning still gives natural gas a major role. CFE’s 2025–2030 generation expansion plan includes 12 strategic projects totaling 5,840 megawatts. Four approved combined-cycle plants in Salamanca, Tula, Mazatlán, and Altamira will use natural gas, while a new plant in Los Cabos will also rely on gas in an isolated regional system. [4]
This confirms that Mexico is not preparing for a rapid exit from gas. Instead, it is using gas to replace less efficient thermal generation, support system reliability, and meet rising demand while renewable capacity grows. That strategy can reduce some local pollution and improve plant efficiency, but it also deepens the need for dependable fuel supply.
The future of natural gas in Mexico will be determined by three connected tests: whether Pemex can raise domestic production, whether pipeline and storage infrastructure can reduce regional vulnerability, and whether the country can balance power demand with a growing LNG export business. Gas is likely to remain one of Mexico’s most important fuels through the next decade. The larger question is whether the sector becomes more resilient and domestically supported, or increasingly dependent on a single external supply system.
