New Fortress Energy Considers LNG Export Facility in Mexico

New Fortress Energy (NFE) revealed on Thursday that it is considering establishing a liquefied natural gas (LNG) export facility in Mexico, which would be an onshore complement to its offshore project. 

The company's disclosure came in response to an Oct. 30 letter from the US Department of Energy, informing the company that an existing gas export permit does not allow for an onshore facility. The company's Fast LNG 1 project, located on converted oil platforms off the coast of Altamira, Tamaulipas, will be Mexico's first LNG production and export facility when it becomes operational. NFE says that it expects this project to start producing up to 1.4 million metric tons per year.

"The onshore project is still in the preliminary stages of development," a NFE attorney responded to the Department of Energy. "This potential onshore LNG export project would complement the offshore project."

In an Oct. 16 presentation to the US Securities and Exchange Commission (SEC), NFE reported that its Fast LNG 2 was "under construction and expected to be deployed onshore in Altamira." In its 2022 export authorization application, NFE described its Fast LNG 2 as an offshore gas liquefaction facility to be installed on separate oil platforms in the Gulf of Mexico waters near Fast LNG 1.

In late June, NFE announced it was expanding its natural gas supply to multiple CFE power generation facilities. It also unveiled plans for an FLNG hub situated off the coast of Altamira, which will harness the underutilized pipeline capacity of CFE and bolster Mexico's burgeoning LNG sector. 

This LNG facility forms a pivotal part of a larger joint initiative involving NFE and CFE, with the collective objective of establishing a US$1.3 billion hub for converting US and Mexican natural gas into LNG for international exports. To further this overarching goal, two additional floating LNG plants are presently under construction, with operations set to begin in 2025. The central focus of this project is the production of LNG, which will be transported through the offshore South Texas-Tuxpan pipeline.

The Altamira facility is strategically located on platforms positioned 15km off the coast of Aldama and 25km from the Port of Altamira. This location offers logistical advantages for potential distribution both within Mexico and on the global stage. To facilitate this distribution, NFE can use the Golar Penguin vessel, which boasts of a net capacity of 158,242m3 when filled with liquefied natural gas.

In June, New Fortress obtained approval from the Mexican government to export up to 7.8 million metric tons of LNG until April 2028. This authorization aligns with the company's prior approval from the US Department of Energy for exports to Mexico and other nations with trade agreements.

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