US natural gas pipeline exports to Mexico reached a record monthly average of almost 7.9 billion cubic feet per day (Bcf/d) in August 2026, reinforcing Mexico’s position as one of the most important growth markets for US natural gas.
The August record was supported by exceptionally strong flows from West Texas and South Texas, alongside Mexican natural gas consumption for electricity generation exceeding 5.8 Bcf/d on a monthly average basis.
The milestone surpassed the previous monthly export record of 7.5 Bcf/d in May 2025. US pipeline exports to Mexico averaged 6.4 Bcf/d in 2024, already 25 percent higher than in 2019.
According to the Wood Mackenzie analysis of US natural gas exports to Mexico, August likely represents the 2026 seasonal peak as cooling demand moderates and maintenance activity increases. However, Mexico’s expanding gas-fired power generation and LNG infrastructure point to a structurally higher level of US gas demand.
West Texas and South Texas Gas Flows Set Records
Texas remains at the centre of expanding US-Mexico natural gas trade.
West Texas flows approached 2.3 Bcf/d on August 13, while South Texas flows exceeded 5.4 Bcf/d on August 26. Both regions recorded new monthly averages and single-day flow records.
West Texas provides an important export outlet for Permian Basin production, while South Texas contains major pipeline infrastructure connecting US supplies with Mexican power generators and other customers.
The strength of these flows coincided with Mexican power-sector natural gas consumption reaching a monthly average above 5.8 Bcf/d, indicating that the export record reflected strong underlying demand rather than pipeline availability alone.
Mexico’s electricity sector is emerging as the primary structural driver. Additional combined-cycle generation creates recurring fuel requirements, while summer cooling loads can push consumption considerably higher during peak periods.
Wood Mackenzie Research Manager Ricardo Falcón said the August performance reflected both structural growth in Mexico’s gas-fired power sector and the intensity of the 2026 cooling season.
US Pipeline Gas Exports Forecast to Reach 10 Bcf/d
The broader US outlook points toward further export growth.
The US Energy Information Administration expects total US natural gas pipeline exports to average 9.6 Bcf/d in 2026 and increase to 10.0 Bcf/d in 2027, compared with 9.5 Bcf/d in 2025.
The EIA US natural gas market outlook identifies stronger Mexican demand, including new gas-fired power generation and LNG infrastructure, as a contributor to export growth.
Mexico is becoming increasingly important because its demand combines electricity generation with another rapidly developing market: LNG.
Energía Costa Azul Opens New LNG Demand Channel
Mexico is evolving from being primarily a consumer of imported US natural gas into a conduit connecting US production with international LNG markets.
Energía Costa Azul shipped its first LNG cargo on July 8, 2026, while Phase 1 introduced 0.4 Bcf/d of nominal LNG export capacity.
The facility uses US natural gas sourced from the Permian Basin, creating an additional destination for cross-border pipeline volumes.
This development means US gas flowing into Mexico can now serve domestic electricity consumption as well as LNG customers overseas. Additional LNG development could therefore increase Mexico’s demand for US gas independently of domestic weather conditions.
Kinder Morgan Invests in South Texas-Mexico Capacity
Growing demand is encouraging new pipeline investment.
Kinder Morgan’s Tennessee Gas Pipeline filed an application with the Federal Energy Regulatory Commission on June 5, 2026, for its approximately $90 million South Texas Enhancement Project.
The project would add incremental firm transportation capacity serving South Texas and Mexican markets. It includes approximately 1.7 miles of new pipeline, an overpressure protection facility and a new compressor station, with an expected in-service date in the second quarter of 2028 subject to approvals.
Kinder Morgan is also developing its approximately $200 million NGPL Amarillo Expansion, which is designed to provide up to roughly 550,000 dekatherms per day of additional firm transportation capacity backed by long-term commitments.
The investment is significant given that South Texas gas flows exceeded 5.4 Bcf/d during August.
ONEOK Expands Permian Gas Processing Capacity
Infrastructure investment is also accelerating upstream of the export pipelines.
ONEOK announced an agreement on August 30 to acquire Brazos Midstream’s Midland Basin gathering and processing assets for $4.425 billion in cash.
The transaction is supported by a $9 billion nonvoting minority equity investment from Apollo-managed funds.
The acquisition is expected to more than double ONEOK’s Midland Basin processing capacity to approximately 2.3 Bcf/d, including facilities under construction. The acquired network includes around 600,000 dedicated acres covered by long-term fixed-fee contracts with an average remaining duration exceeding 12 years.
Although the acquisition is not specifically a Mexico export investment, additional Permian processing capacity strengthens the supply system feeding West Texas and other major gas markets.
Williams Adds 6 Bcf/d of Gathering Capacity
Williams is also investing heavily in natural gas infrastructure.
The company announced a transaction valued at up to $5.5 billion to acquire Momentum Midstream, expanding its Haynesville presence and connectivity to Gulf Coast LNG facilities, power generators and industrial customers.
The transaction adds more than 4,000 miles of pipeline infrastructure, over 1 million dedicated acres and approximately 6 Bcf/d of gathering capacity.
It also includes three take-or-pay pipelines capable of transporting 4.05 Bcf/d.
These investments demonstrate the scale of capital being deployed across US natural gas infrastructure as LNG exports, electricity consumption and cross-border demand expand simultaneously.
US LNG Growth Increases Competition for Gas
Mexico will increasingly compete with US LNG terminals for incremental natural gas supplies.
Cheniere Energy exported 184 LNG cargoes during the second quarter of 2026, an increase of 19.4 percent from a year earlier.
The company generated approximately $5.7 billion in Q2 2026 revenue and $1.8 billion in consolidated adjusted EBITDA. First-half revenue reached about $11.6 billion, while adjusted EBITDA totalled approximately $4.1 billion.
Cheniere also increased its full-year 2026 adjusted EBITDA guidance to $7.90 billion-$8.40 billion, from $7.25 billion-$7.75 billion previously.
Rising LNG exports matter for Mexico because US LNG facilities, Mexican customers and domestic power generators increasingly depend on overlapping gas-producing regions and pipeline networks.
Power Sector Could Add More Than 27 Bcf/d of Gas Demand
Electricity generation could become an even larger source of natural gas demand.
Wood Mackenzie expects North American power-sector gas consumption to increase by more than 27 Bcf/d between 2026 and 2043, including more than 4 Bcf/d over the next five years.
Power generation is eventually expected to overtake LNG exports as the leading source of North American natural gas demand growth.
The forecast has major implications for Mexico. US producers could simultaneously face growing requirements from American power plants, Mexican generators, LNG export terminals and industrial customers.
That increases the strategic value of production, processing and pipeline capacity.
Natural gas asset transactions exceeded $32 billion globally during the first half of 2026, the highest first-half level in more than a decade, according to Wood Mackenzie. The average premium for gas-focused upstream transactions reached 21 percent relative to Wood Mackenzie valuations.
Pipeline Capacity Becomes Critical to Mexico Gas Growth
The August record highlights one of the biggest challenges facing further US-Mexico gas expansion: transportation infrastructure.
Increasing production alone cannot satisfy demand unless sufficient gathering, processing, compression and pipeline capacity is available to move gas from producing basins to customers.
The issue is particularly important in West Texas and South Texas, where rapidly rising Permian production and Mexican demand can create regional constraints.
Projects such as Kinder Morgan’s $90 million South Texas Enhancement Project demonstrate how pipeline companies are responding, but new infrastructure requires regulatory approvals, construction time and long-term commercial commitments.
Pipeline bottlenecks could therefore increase regional gas-price volatility if Mexican power and LNG demand expands faster than transportation capacity.
Mexico Could Set Another US Gas Export Record in 2027
August’s almost 7.9 Bcf/d export level is expected to decline seasonally as temperatures fall, cooling requirements weaken and maintenance increases. But the underlying demand base is continuing to expand.
Mexico’s growing combined-cycle generation fleet creates long-term fuel demand, while Energía Costa Azul has added 0.4 Bcf/d of LNG export capacity. At the same time, EIA expects overall US pipeline gas exports to rise from 9.6 Bcf/d in 2026 to 10.0 Bcf/d in 2027.
The progression of Mexican imports — from an average 6.4 Bcf/d in 2024, to a record 7.5 Bcf/d in May 2025, and nearly 7.9 Bcf/d in August 2026 — indicates that cross-border natural gas trade is moving into a higher-demand phase.
Another Mexican export record in 2027 may therefore require less help from extreme summer weather. A higher baseline created by new power generation, LNG exports and greater pipeline utilisation could be enough to push volumes beyond the August 2026 peak.
For US producers and midstream companies, Mexico is becoming a critical part of a broader natural gas demand network encompassing North American electricity generation, US and Mexican LNG facilities and industrial customers.
SHAFANA FAZAL
