Mexico: Highlights MEXICO

USA

TOTAL  POPULATION:    

112.3  MILLIONS1  

309.3  MILLIONS  

GDP:  

USD  $1,039  MILLON  2  

USD  $14,582  MILLION2  

8TH PLACE IN NATURAL GAS WORLD CONSUMPTION 3,029 BCF 3 13

PLACE IN NATURAL GAS WORLD PRODUCTION 2,051 BCF 3 TH

35TH PLACE IN NATURAL GAS WORLD PROVED RESERVES 12.3 TCF 3 ELECTRICITY PRODUCTION FROM FOSSIL FUELS - NATURAL GAS (2012)4 RUSSIAN COUNTRY

USA

FEDERATION

JAPAN

IRAN

MEXICO

ITALY

EGYPT

SAUDI ARABIA

TWH

1265

525

397

170

151

129

125

121

THAILAND KOREA 112

117

REST OF THE WORLD

WORLD

1988

5100

Source: INEGI. Census of Population and Housing, 2010 Basic Questionnaire. World Bank. 3 Source: Bp Statistical Review of World Energy June 2015. http://www.bp.com/content/dam/bp/pdf/Energy-economics/statistical-review-2015/bp-statistical-review-of-world-energy-2015-full-report.pdf 4. Source: Iea.org, Key World Energy Statistics 2014. 1

2 Source:

Natural gas consumption by sector Consumption Distribution By Sector (August 2015) COMMERCIALS 352

SELF-GENERATION 141 3%

7%

Pemex Exploración y Producción

ELECTRICITY 1,410 26% 40%

7% 17% DISTRIBUTORS 388

SOURCE: BDI, SEPT 2015

INDUSTRIAL 894

PEMEX 2,159

1,262

Pemex Refinación

390

Pemex Gas y Petroquímica Básica

187

Pemex Petroquímica

320

Industrial demand of natural gas & manufacturing GDP growth •  In the last decade , the growth of natural gas consumption in the industrial sector has shown an annual average growth of 5.4 percent, well above the 1.9 percent rate that obtained the manufacturing GDP figure the same period Industrial Demand (MMcfpd)

Manufacturing GDP (Billion Pesos 2008)

16.38

15.50 8.5

8.42 4.5 2006

2.57 1.0 2007

10.16 7.11 4.6

4.59 4.1

3.7

1.0

-1.0

2008 -1.30

4.98

2009

2010

-8.4 -11.08

2011

2012

2013

2014

1.8 2015

Estimate trends for mexican industrial demand of natural gas 3,000

2,500

MMcfpd

2,000

1,500

1,000

500

Industrial

2013 1,240

2014 1,366

2015 1,590

Source: SENER “Prospectiva de gas natural y gas LP 2014-2028”

2016 1,713

2017 1,804

2018 1,910

2019 1,973

2020 2,033

2021 2,100

2022 2,166

2023 2,234

2024 2,304

2025 2,383

2026 2,462

2027 2,546

2028 2,630

Natural gas forecast demand in Mexico MMCFPD 14,000   12,000   10,000   8,000   6,000   4,000   2,000   0   2015  

2016  

2017  

2018  

2019  

2020  

Pemex  producAon   Source: SENER “Prospectiva de gas natural y gas LP 2014-2028”

2021  

2022  

Imports  -­‐  exports  

2023  

2024  

Total  Demand  

2025  

2026  

2027  

2028  

Connecting Mexico with better markets NGPL

REX

USA

Sásabe  

O TETC

Tennesse zone 4-300 Leg

San  Isidro   Samalayuca  

Puerto   Libertad  

Henry Hub El  Encino  

Guaymas  

Agua Dulce

Colombia  

THE MEXICAN PIPELINE

Camargo   El  Oro   Topolobampo  

La  Laguna   Durango  

Mazatlán  

EXPANSIONS ARE GIVING THE

Escobedo   Los  Ramones  

POSSIBILITY TO ACCESS IN CHEAPER MARKETS IN THE U.S.

Zacatecas   Altamira   V.  Reyes   San  Luis  Potosí   Naranjos   Aguascalientes   Tamazunchale   Tuxpan   Guadalajara   Tula   Apaseo  el   Alto   NaAvitas   Cempoala   Huexca   Lázaro   Cárdenas  

JálApan   Nuevo  Pemex  

Ciudad   Pemex  

Acapulco   Salina     Cruz  

Tapachula  

Current Interconections to the Mexican Border Firm Capacity

El PasoNaco

El PasoWilcox

North Baja

Interruptible capacity OneOk/OkTex

Kinder Morgan Texas Net Mex Pipeline

El Paso Bajanorte

Kinder Morgan Border

Naco

Enterprise Tetco

Cd. Juárez Tarahumara Rosarito

Camargo

GDCH

Hermosillo Chihuahua

Net Mexico Pipeline (Texas)

Firm Capacity MMBtu 1,000,000

Kinder Morgan Border (Texas)

230,000

Kinder Morgan Texas (Texas)

525,000

Tennessee Gas Pipeline (Texas)

243,000

El Paso Natural Gas (Arizona)

10,661

El Paso Natural Gas (Texas)

54,790

Argüelles Reynosa

Kinder Morgan GN México

Monterrey

Transport system

Tennessee Río Bravo

Mier

Samalayuca

Tennessee Reynosa

GDN

GDR

Est. Nº19

Río Bravo

Los Ramones Gasoductos de Tamaulipas

San Fernando

LNG

Related market prices HYDROCARBONS* CRUDE OIL (WTI, CUSHING OKLAHOMA NYMEX) HEATING OIL (DIESEL, NYMEX NEW YORK HARBOR) PROPANE (MONT BELVIEU, TX.) NATURAL GAS (HENRY HUB, NYMEX) FUEL OIL (HIGH SULFUR FUEL OIL, NYMEX) GASOLINE (NYMEX)

ORIGINAL PRICES $46.14 USD/BARRIL $1.5 USD/GAL $43.8USD/GALÓN $2.5 USD/MMBTU $212 USD/GAL $1.27 USD/GAL

EQUIVALENT PRICES $7.9 USD/MMBTU $11 USD/MMBTU $4.8 USD/MMBTU $2.5 USD/MMBTU $5.4 USD/MMBTU $10.1 USD/MMBTU

USD/MMBtu 24.8

24

International prices Mexico prices

11 7.9

10.1

7.9

7.5 5.4

4.8 2.5

Prices of Natural Gas Crude  Oil    

Information as of Oct 19, 2015 *Reference Prices

HeaAng  Oil  

Propane  

Natural  gas  

Fuel  oil  

Elaborated by Pemex Gas y Petroquímica Básica using Thomson Reuters prices.

Gasoline  

Natural gas international prices Prices as October 14th 2015 (USD/MMBtu)

$6.04/6.02  

$  2.52/2.52   Nymex  Henry  Hub  

Dutch  TTF  

$6.23/6.06  

$2.57/2.58  

UK  NBP  

So  Cal  

$6.64/6.68   Italian  PSV  

EUROPA

$6.45/6.40  

$6.65/6.60   Japón  

China  

ASIA

$  5.37/3.50   Algonquin  

$2.45/2.46  

$6.06/6.04   Germany  EGT  

 Reynosa  

$6.65/6.60  

$7.16/7.16    Perú  

* Prices in green are from a previous week Source: Elaborated by Pemex Gas y Petroquímica Básica using Platts International Gas Reports.

India  

$6.65/6.60   Corea  del  Sur  

Net exports from us to Mexico (2014-2015) PGPB only NET EXPORTS 2014-2015 (MMBTU/D) 2014

2015

1. WESTTEXAS

299,339

45,940

2. SOUTH TEXAS

979,800

1,227,949

WEST TEXAS 2014 WEST TEXAS, AZ. CALIF.

2015

MMBTU/D

SOUTH TEXAS TRANSPORTATION SOUTH TEXAS (MMBTU/D)

2014

2015

TENNESSEE (1999)

215,398

67,652

K.M. BORDER (2000)

216,192

173,816

SAMALAYUCA

89,718

0

CHIHUAHUA-CDJ

117,965

38,796

K.M. TEXAS (2003)

422,316

452,441

NACO

34,801

7,144

TENNESSEE RB (2003)

73,768

0

NORTE II

56,855

0

TETCO (~ 1950)

41,818

2,712

0

0

NET (2014)

10,308

531,328

299,339

45,940

979,800

1,227,949

NORTH BAJA

TOTAL: Source: BDI, Sept 2015.

TOTAL:

Net exports from US to Mexico (2014 - 2015) PGPB only MMBTu/day

2015

2014

1,422,843 1,324,219 1,318,019 1,285,747 1,286,183 1,208,740

1,139,254 1,108,041

1,168,491

1,368,500

1,488,615 1,486,642 1,447,268 1,402,086 1,424,591 1,380,998 1,307,756

1,270,997

1,051,378

1,133,078

1,011,832

NET AVERAGE EXPORTS 2014 – 2015 (MMBTU/D)

Ene Jan

* Jan-Sep 2015

Feb

Mar

Abr Apr

2014

2015*

1,279,139

1,273,889

May

Jun

Jul

Ago Aug

Sep

Oct

Nov

2014   2015  

Dic Dec

Source: BDI 2015 September

Natural gas transport infrastructure 2015 5,825 MILES OF NATURAL GAS PIPELINES1 i i LNG Ensenada

Tucson i Sásabe

15 COMPRESSION STATIONS: - 402,115 HP - 265,725 HP: PEMEX GAS - 136,390 HP: PRIVATES

i i

i

Gloria a Dios Naco

El Sueco

5,0122 MMCFPD TRANSPORT CAPACITY IN THE NGS (NATIONAL GAS SYSTEM) AND 90 MMCFPD IN NACO – HERMOSILLO PIPELINE.

i Guaymas

Kinder Morgan

i i

Chávez Los Ramones Zacatecas Aguascalientes S.L.P.

i i

1 2

PRIVATE PIPELINES PEMEX GAS PIPELINES PEMEX GAS IMPORTS PRIVATE IMPORTS PEMEX GAS COMPRESSION STATION PRIVATE COMPRESSION STATION

Guadalajara Valtierrilla i LNG Manzanillo

GDT

Altamira i LNG Altamira

Tamazunchale El Sauz

Tejas Gas

Mayakan

Source: Memory tasks 2012 (9,038 km). It includes Jáltipan Salina Cruz 12” pipeline and Los Ramones Project Phase I, which will provide 71.46 miles in December 2014. Reference: Capacity in accordance with Resolution 204 of 2010 of the Energy Regulatory Commission.

Natural gas infrastructure projects 2015-2019 Sásabe

5

1

Pipelines 1. San Isidro- Samalayuca (CFE) 2. Sur de Texas – Tuxpan (submarino) (CFE) 3.  Tula – Villa de Reyes (CFE) 4.  Tuxpan – Tula (CFE) 5.  Samalayuca – Sásabe (CFE) 6.  Colombia – Escobedo 7.  Jáltipan – Salina Cruz (PEMEX) 8.  Los Ramones – Cempoala 9.  Villa de Reyes - Ags. – Guadalajara (CFE) 10.  La Laguna – Aguascalientes (CFE) 11.  Lázaro Cárdenas – Acapulco 12.  Salina Cruz – Tapachula

San Isidro

Samalayuca

Puerto Libertad

El Encino

Guaymas

Colombia

6

Camargo

El Oro La Laguna

Topolobampo

Escobedo Los Ramones Durango

LNG regasification terminals   Pipelines in operation Concluded Pipelines (2013/2014/2015)

Mazatlán

2

10

Zacatecas San Luis Potosí Aguascalientes

8 Tamazunchale

3

9

Guadalajara

Altamira

V. Reyes

4

Naranjos Tuxpan

Tula

Apaseo el Alto Nativitas

Pipelines in construction (2015/2016)   Pipelines included at “Plan Quinquenal” Compression Station “El Cabrito”

Cempoala

Huexca

11

Lázaro Cárdenas Acapulco

Ciudad Pemex Jáltipan Nuevo Pemex

7 Salina Cruz

Source: SENER. Plan Quinquenal de Transporte y Almacenamiento Nacional Integrado de Gas Natural 2015-2019.

12 Tapachula

Natural gas infrastructure projects 2015-2019 Project  

Sponsor  

Es>mated   Es>mated   Lenght   Investment   date  of   (kms)   (MMUSD)   Bidding  

Es>mated   Opera>onal   Date  

1  

San  Isidro  -­‐  Samalayuca  

CFE  

23  

109*  

2015  

2017  

2  

Sur  de  Texas  –  Tuxpan  (submarino)  

CFE  

800  

3,100  

2015  

2018  

3  

Tula  –  Villa  de  Reyes  

CFE  

295  

420  

2015  

2017  

4  

Tuxpan  –  Tula  

CFE  

263  

400  

2015  

2017  

5  

Samalayuca  –  Sásabe  

CFE  

650  

571*  

2015  

2017  

6  

Colombia  –  Escobedo  

To  be  define  

300  

N/A  

2016  

2018  

7  

JálApan  –  Salina  Cruz  

PEMEX  

247  

643  

2015  

2017  

8  

Los  Ramones  –  Cempoala  

To  be  define  

855  

1,980  

2017  

2019  

9  

Villa  de  Reyes  -­‐    Aguascalientes  –  Guadalajara  

CFE  

355  

555  

2015  

2017  

10   La  Laguna  –Aguascalientes  

CFE  

600  

1,000  

2016  

2017  

11   Lázaro  Cárdenas  –  Acapulco  

To  be  define  

331  

456  

2016  

2018  

12   Salina  Cruz  –  Tapachula  

To  be  define  

440  

442  

2016  

2018  

PEMEX  

N/A  

60  

2015  

2016  

13   El  Cabrito  Compression  StaAon  

*Amount of investment estimated by the winning bidder of the project

Firm export capacity of natural gas from US to Mexico 2014-2016 2.520  

1.988  

1.974  

1.588   Bcf/D  

MGS   1.115  

CFE  

0.300  

2014  

2015  

2016  

Energy reform THE OPERATION OF PEMEX AS UNIQUE PRODUCER OF HYDROCARBONS IN THE COUNTRY HAS BEEN MODIFIED BY A NEW MODEL OF OPEN COMPETITION: PEMEX BEFORE (OLD MODEL)

PEMEX NOW (NEW MODEL)

DECENTRALIZED PUBLIC ENTITY

§  PRODUCTIVE COMPANY OF THE STATE (PEMEX). §  PRODUCTIVE SUBSIDIARIES ENTITIES (PEP, TRI & LOGISTICS).

RESOURCE MANAGER

§  COMPETITIVE COMPANY WHOSE PURPOSE IS TO CREATE ECONOMIC VALUE.

RESPONSIBLE OF SUPPLY ASSURANCE

§  MARKET SHAREHOLDER. §  SENER IS ON CHARGE OF ENERGY SECURITY, IN SUPPLY MATTERS.

PERMIT REGIME FOR SOME

§  PERMIT REGULATION FOR ALL ACTIVITIES OF THE VALUE CHAIN.

ACTIVITIES

New Business Models - Downstream PEMEX has developed successful strategic alliances in downstream activities. GAS PIPELINES JOINT VENTURES PEMEX’S PARTICIPATION

COMPANY

OBJECTIVE

El Paso Natural Gas (1997) Sempra Energy (2010) (partner)

NET (partner)

Kinder Morgan/ Mitsui (partners)

NATURAL GAS AND LPG

TO DEVELOP

TO DEVELOP

INFRASTRUCTURE PROJECT “LOS RAMONES II NORTH AND

TO DEVELOP

TRANSPORTATION TO POWER PLANTS IN THE NORTHERN

INFRASTRUCTURE PROJECT “AGUA DULCE-

SOUTH”

FRONTERA”

INFRASTRUCTURE PROJECT “TUCSON-

2013

2013

REGION OF

OPERATIONS STARTUP

MGS & MGE (subsidiaries) / GCh (investee) / GDF Suez (partner)

MEXICO

1997

SÁSABE”

2013

Conclusions •  PEMEX, as a Productive State Enterprise aims to maximize economic value and profitability for the Mexican state, by improving its productivity to maximize oil and gas revenues and contribute to national development. •  PEMEX operation as the only producer of hydrocarbons in the country has changed by a new model of open competition. •  PEMEX can take advantage of the opportunity to establish new legal framework with strategic partners to consider alliances or joint ventures.