Mexico Plans to Invest US$14 Billion in LNG
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Mexico Plans to Invest US$14 Billion in LNG

Photo by:   Anita Starzycka, Pixabay
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Karin Dilge By Karin Dilge | Journalist and Industry Analyst - Fri, 10/20/2023 - 05:16

Mexico plans to build two mega-liquefaction projects that exceed US$14 billion in investment. These projects come as the world transitions to less polluting fuels, with natural gas being considered a key element in this transition. Additionally, the conflict between Russia and Ukraine has raised concerns in the EU about the need to diversify its suppliers to reduce dependence on Russian gas.

The projects involve a liquefaction plant built by Mexico Pacific in Puerto Libertad, Sonora, under the name "Saguaro Energía LNG." In its first stage, this 445ha plant will be able to transport 15 million tons per year. In the second phase, it plans to double its production volume to 30 million tons.

"With this [project], we are turning Mexico into the fourth-largest exporter of liquefied natural gas in the world, just behind Qatar, the United States, and Australia," Alberto Alonzo, Country Head, Mexico Pacific, tells Energy 21. 

Over the past three years, other companies such as Sempra Energy and New Fortress Energy have also unveiled plans to establish LNG liquefaction facilities at Mexican ports. These initiatives aim to facilitate the re-export of US natural gas and leverage their advantageous proximity to the Waha natural gas hub in Texas. Additionally, these projects would take advantage of the available pipeline infrastructure with surplus capacity. For Pacific ports, there is the added benefit of potentially bypassing the congested Panama Canal route. In November 2020, Sempra Energy committed US$2 billion to develop the Costa Azul liquefaction project in Ensenada, Baja California. In January 2022, the company announced plans to build another terminal at the port of Topolobampo, Sinaloa.

Mexico's growing demand for natural gas poses a dual scenario of challenges and potential for the country's energy sector. Ivan Van der Walt, CEO, Mexico Pacific, highlighted the pivotal role of natural gas in achieving global energy security and navigating the transition to cleaner energy sources. He reaffirmed the company’s commitment to providing essential energy solutions for the foreseeable future.

Photo by:   Anita Starzycka, Pixabay

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