Sempra Signs MOU With CFE for Development of LNG Projects

CFE and Sempra Infrastructure signed a memorandum of understanding (MOU) for the development of several natural gas projects, as well as for the negotiation of contracts to use surplus natural gas transport capacity. The projects include the Vista Pacifico liquefied natural gas (LNG) liquefaction project in Topolobampo, Sinaloa, a natural gas regasification project in La Paz, Baja California and the renewal of operations of the Guaymas-El Oro pipeline in Sonora.

The projects will allow CFE to optimize excess natural gas and pipeline capacity between Texas and Topolobampo, while increasing supply toward its power plants in Baja California Sur. The initiatives boost President Andrés Manuel López Obrador's commitment to supply the state with low-cost electricity and lower-emission fuels and strengthen CFE's position in global LNG markets.

Guaymas-El Oro, part of Sempra’s Sonora pipeline system, has been inactive since 2017 due to a dispute with the Indigenous Yaqui community. The MOU addresses the pipeline’s reactivation via a proposed re-routing based on a mutual understanding between the Yaqui community and CFE. The new route allows CFE to supply natural gas to industrial, commercial and residential markets in the Pacific Coast of Mexico and Baja California Sur, as well as to the Vista Pacifico LNG facility.

Sempra Infrastructure is a subsidiary of the US energy company Sempra, presented in Mexico in April 2021 on the back of a merger of IEnova and Sempra’s LNG arm. The Vista Pacifico LNG liquefaction project in Topolobampo adds to Sempra’s Energia Costa Azul LNG venture, making it its second LNG project in Mexico. When finished, Vista Pacifico would export about 4 million tons of LNG per year.

The MOU follows a CFE announcement in January regarding plans to launch multiple tenders for natural gas infrastructure toward making excess pipeline capacity on the US-Mexico border available. Over the past decade, CFE has commissioned a massive buildout of pipelines with the aim to import US natural gas for its power plants amid declining production by NOC PEMEX.

“Through these combined actions, CFE contributes to strengthening the country’s energy security and reaffirms its commitment with the Mexican people, while Sempra Infrastructure agrees to continue to work to develop critical new energy infrastructure in Mexico,” Sempra Infrastructure said in a statement.