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NATURGY

MEXICO - Energy & Mining

Alejandro Peón Peralta

Country Manager Mexico, Naturgy Mexico

Bio

Alejandro Peón Peralta is an engineer from the National Autonomous University of Mexico (UNAM) with over 20 years of experience in the energy sector. In 2021, he was appointed Managing Director of Naturgy in Mexico, responsible for managing and developing electricity generation projects and natural gas distribution systems. He promotes the development of this important energy source in more than 52 cities where the company has a presence.

"This is a significant period in the history of Mexico and specifically for the energy sector, and I feel fortunate to be involved in it."
As a major gas distributor, Naturgy prioritizes investments in infrastructure development while emphasizing the importance of smoother regulatory processes to ensure a successful energy transition.
Why do you believe Mexico is experiencing a significant transition within the energy sector?

This is a significant period in the history of Mexico and specifically for the energy sector, and I feel fortunate to be involved in it. The last few years have been challenging, though Mexico has several significant advantages. In a situation where many countries are struggling to have access to natural gas and are paying extremely high prices, Mexico’s access to natural gas from the US is one of its most favorable conditions. The energy transition does not just depend on evolving the types of energy we consume to be more eco-friendly; we must also think about how we produce this energy, how much is available, and how we supply it to people. We have to create a realistic strategy for the energy transition, and in Mexico natural gas will play a major role in helping the country to develop the infrastructure required to take advantage of nearshoring.

What steps should the country take to provide more energy security in Mexico?

The keys to Mexico succeeding in nearshoring are infrastructure and communication—we need excellent logistics and energy infrastructure. In the north, we have the most important energy distribution in Monterrey as well as Saltillo, which is an important industrial city. Another vital point is communication, as we are a diverse country and need listen to each other, act with speed, empathize, and put the good of society as a whole first. We are only just starting to see tangible projects becoming a reality here. When it comes to natural gas, there are three steps to the process: the extraction from the ground; transporting it to the edge of a city; and lastly making sure it gets to the point of consumption. Naturgy is by far the biggest distributor of natural gas in the country, with around a 60% market share. Developing the required infrastructure is a simple concept—the distributor just needs to invest in infrastructure to transport the molecules of gas. However, we do not earn money from the molecules of gas per se; we earn profits from the returns on investment that we made, namely bringing gas directly to consumers’ homes. The country’s regulations were designed very conservatively, because energy was not a priority market. There are areas in the regulations that can be improved, though that is not a fundamental factor in nearshoring succeeding or failing. The fundamental point here is the execution of the infrastructure. That is where Mexico has a great opportunity, because to develop infrastructure in Mexico, one needs federal, state, and municipal permits as well as social permits. To develop in a block in the city, we have gone through 11 different institutions, and it has taken us eight months so far just to install a 63mm pipe in the ground. Making this process faster and smoother is key to the development of nearshoring. In Monterrey, everyone participating in this development had to come together and work in agreement for the benefit of the area. Next, we had to look for the best industrial parks and apply for the government permits for these parks. There are many things to consider, and communication is key. To me, nearshoring involves everyone in Mexico, and we all need to play our part to ensure it succeeds.

What are the main priorities of Naturgy in Mexico at the moment?

Naturgy is an energy company that can manage any energy project one can think of. Speaking about the future of Mexico and the energy transition, we have to set priorities, we see many opportunities in the development of natural gas and would like to develop in areas where we have permissions to. We are always looking to participate in new projects, whether they are greenfield projects, generation projects, or so on. It is important that we never stop believing in the possibilities of Mexico.

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