VIEW FROM THE TOP
KEEPING PIPELINES GOING FOR THE LONG TERM JAN FROWIJN Director General of the ROSEN Group Mexico
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Q: What needs to change for new technologies to be
our bills. I think one current problem is the domino effect
accepted more quickly in the Mexican oil and gas market?
resulting from issues within PEMEX. We also see this with
A: In some parts of the Mexican market there is a reluctance
some of our subcontractors, which have had a very hard time,
to make decisions and try new technology. In other words,
and in some cases are on the brink of going out of business
there is risk avoidance in terms of people sticking to what
because of work that has been done for PEMEX but simply is
they are used to and not looking for new or better ways of
not being paid. PEMEX’s decision-making process still obeys
doing things. But budget is another factor that remains a
to factors outside of a purely technical standpoint. There
constraint not only on the liquid side, but also with some of the
is a prevalent misalignment between the NOC’s long-term
natural gas pipeline operators. In times of budget constraints,
vision, highlighting the strategic asset that pipelines represent,
decisions are often made to create short-term savings rather
compared to its short-term decisions.
than invest in the mid to long term. Although there are some very good examples of operators where this is not happening,
Q: How do you rate the Five-Year Plan created by CENAGAS
other operators have more of a short-term focus rather than
for pipeline networks?
a mid to long-term plan with regard to pipeline systems,
A: CENAGAS’s Five-Year Plan conveys a completely different
integrity and performance.
approach from what we have seen in the past. I think this plan really recognizes the importance of the PEMEX natural
Q: What is your opinion regarding PEMEX’s budgetary
gas legacy system for the country’s energy security. There is
constraints, particularly on maintenance?
a lot of focus on expanding new pipelines but the emphasis
A: PEMEX is in a difficult situation and we are trying to support
should also be on maintaining the legacy system effectively
the NOC wherever we can. It is a very good customer for
and efficiently operating the system.
us and has been for more than 20 years. It is not in our nature to just drop a company because of its restructuring
We have been working with CENAGAS and we see a very
and budgetary issues. We will support PEMEX in prioritizing
structured approach to prepare a system for further growth
activities in its budget and in working with the people of
and catering to demand in the future. We also see a very
PEMEX who are responsible for the integrity of pipelines
structured approach that is focused on the safety and integrity
on a day-to-day basis. Together, we are trying to make the
of the natural gas distribution system. I have less experience
best decisions and spend the money that is available in the
with distribution systems and more experience with natural
smartest way possible. Effective operational expenses and
gas transmission, but there is clearly an approach that tries
budgets are the name of the game. The results we see now
to embrace international best practices and the experience
in the Mexican oil and gas industry are basically the result of
that has been brought into Mexico by international operators.
working with PEMEX in the past. I think that is something the industry as a whole needs to appreciate.
Q: How can industry regulators and private players work together to materialize this plan?
That does not mean that it is easy working with PEMEX.
A: For an industry to be successful, it is imperative that all
The payment terms are extremely long. Ultimately, we are
stakeholders, private investors and regulators included, work
also a business, not a charity, and we need liquidity to pay
together in the industry. Past experiences outside of Mexico attest to it. The closer all interested parties work together, looking at short and midterm opportunities, the better
The ROSEN Group is a worldwide provider of cutting-edge
the stage will be set for long-term success. Operators, gas
solutions in all areas of the integrity process chain. Innovation,
shippers, regulators, service providers and strong industry
expertise and a strict orientation based on customer needs are
organizations within the natural gas industry are all key pieces
the keys to ROSEN’s unique success story
of the puzzle. Effective regulation is the bedrock on which
