Mexico Energy Monitor

August 30, 2023

In-Depth Mexico’s LNG Export Projects: 

• With the potential for adding at least 5 MTPA (million tons per year) of liquid natural gas (LNG) in the next couple years and more than 20 MTPA in the long-term, Mexico certainly appears on track to becoming a significant exporter. This forecast gained momentum with US private player New Fortress Energy (NFE) recent confirmation that its new liquefaction and export facility in Altamira, Tamaulipas state, would start by October. A collaboration with Mexico’s state-owned power company CFE, the Altamira unit, backed by an offshore facility for facilitating export, aims to export 1.4 MTPA (million tons of LNG per year) using CFE’s existing capacity fed by the Sur de Texas-Tuxpan Pipeline, built by Canadian midstream player TC Energy

  

• These projects are driving Mexico into the massive global LNG market. According to US energy agency EIA, global LNG trade volume grew to 51.7Bf3/d (billion cubic feet per day) in 2022, equivalent to almost 393 million tons over a year. LNG trade has been booming since Russia’s February 2022 invasion of Ukraine, and desire to re-source natural gas supply, particularly in Europe. EIA reported Qatar was top exporter in 2022 averaging 10.5Bf3/d (about 80 MPTA), followed by Australia with 10.4Bf3/d. The US is quickly catching up to both. US LNG exports soared from around 2.1Bf3/d in 2021 to 11.2Bf3/d in the first half of 2022, briefly making it the largest LNG exporter, before an unplanned outage at the Freeport LNG plant in October 2022 caused the annual figure to drop below the averages of Qatar and Australia.

• Even at 20 MTPA, Mexico would be a smaller player, but NFE and other players are working to get there. Other key LNG projects on the horizon include NFE’s collaboration with national oil company Pemex to extract, package and export natural gas from the deepwater Lakach gas deposit in the Bay of Campeche. On the West Coast are Sempra Infrastructure’s US$2 billion Energía Costa Azul (ECA) project north of Ensenada, Baja California state, and Mexico Pacific’s recently confirmed Saguaro Energía LNG project in Puerto Libertad, Sonora. ECA is set to begin ramp-up in December 2024 with an initial offtake of around 2.5 MTPA with full operations by December 2025 to export 3.25 MTPA. The 15 MTPA Saguaro project is still in early works, and a large part of the US$14 billion planned investment involves the construction of a pipeline in Mexican territory that connects to Mexico Pacific’s infrastructure on the US side.