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News Article

Second Infrastructure Package Includes Nine Energy Projects

By Cas Biekmann | Mon, 11/30/2020 - 17:18

The Mexican government, together with the Business Coordinating Council (CCE), have announced a second package of infrastructure projects. The package consists of 29 projects in total, 9 of which are related to energy and make up an investment of MX$116.7 billion (US$5.79 billion). Each project will receive at least 50 percent of private investment.

One of the key projects announced is the gas terminal being built by IEnova, Sempra Energy’s Mexican subsidiary. The project will be able to liquify excess gas contracted by CFE to transport it to Asia and will require an investment of MX$47 billion (US$2.28 billion). The existing facility, called Energía Costa Azul, is waiting on the permit it needs to be allowed to export the liquefied natural gas (LNG). Despite this, investment is already taking place. Furthermore, Forbes reported that IEnova has contracted TechnipFMC for the engineering, procurement and construction of the project.

IEnova’s Director General, Tania Ortiz, explained in an interview with MBN why the LNG facility is a great opportunity for the company. “Later, we would distribute this gas to isolated markets in Mexico and abroad. Right now, IEnova is very connected to the North American region. We are among the leaders in terms of cross-border energy infrastructure for both gas and power. This is one of our most exciting initiatives, because it opens a position for us as a global player.”

The other projects concern developments the government has opened to the private initiative, reported Energía a Debate. The projects include the refurbishing of the Transisthmic pipeline to transport natural gas, with investment totaling approximately MX$9 billion (US$446.6 million), compression stations in Tecolutla and Lerdo, for which an investment of MX$1.59 billion (US$78.8 million) has been allocated, as well as six combined cycle (CC) power plants.

The CC plants use natural gas and an extra turbine to recover heat and produce more energy and are part of CFE’s wider plan to build several plants of this nature to meet growing energy demand in Mexico. For now, CFE is focusing its efforts on CC Baja California Sur, with an investment of MX$4.29 billion (US$212.78 million), CC Tuxpan Phase 1, with an investment of MX$12.15 billion (US$620 million), CC González Ortega, with an investment of MX$10.7 billion (US$530.7 million), CC Mérida, with an investment of MX$7.2 billion pesos (US$357.1 million), CC San Luis Colorado, with an investment of MX$10.72 billion (US$530.7 million), and finally CC Valladolid, with an investment of MX$13.53 billion (US$671.1 million).

President of CCE Carlos Salazar reported that the announced infrastructure plans have the potential to create 400,000 new jobs, crucial to economic recovery after the COVID-19 pandemic. Salazar said that CCE and the government are already working on a third package of infrastructure projects, which are still to be determined.

The data used in this article was sourced from:  
El Financiero, Forbes, Government of Mexico
Cas Biekmann Cas Biekmann Journalist and Industry Analyst