Mexican national utility Comision Federal de Electricidad's (CFE) entry into liquefied natural gas (LNG) supply contracts signals a seismic shift in Mexico's energy market, with potentially far-reaching consequences. The move is creating new opportunities for global LNG producers and developers as well as pipeline companies active in Mexico. Although positive, these changes will be challenging.

- The contracts for LNG and associated pipeline capacity will support significant new private investment in Mexico's midstream natural gas sector, potentially opening new opportunities for private players to piggyback on CFE's LNG investments.
- CERA expects significant pressure for regulatory change as LNG volumes may affect Mexico's natural gas pricing methodology and regulated limits on CFE's ability to resell natural gas, and could help drive the first steps toward a spot market for gas.
- Key risks include CFE's ability to financially support additional LNG contracts, given its outstanding PIDIREGAS obligations.

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CERA Reports Online, a wholly owned subsidiary of IHS Energy, is a leading advisor to international energy companies, governments, financial institutions, and technology providers. CERA delivers critical knowledge and independent analysis on energy markets, geopolitics, industry trends, and strategy. CERA's expertise covers all major energy sectors--oil and refined products, natural gas, and electric power--on a global and regional basis.