Developer Mexico Pacific Ltd. LLC (MPL) has brought on former Cheniere Energy Inc. executive Douglas Shanda to be president and CEO of its Pacific Coast liquefied natural gas (LNG) project in Mexico.
Last year, Mexico’s energy regulator Comisión Reguladora de Energía (CRE) authorized construction of the LNG project on the Gulf of California in Sonora state. The project has permission from the U.S. Department of Energy (DOE) to export gas from Arizona to Mexico and from there to re-export LNG globally. MPL is targeting buyers in Japan, South Korea and China given the project’s strategic geographic position.
The facility at Puerto Libertad has the green light to export up to 12 million metric tons/year (mmty) for 20 years, with the gas shipped south from the United States via existing cross-border transmission lines, including Kinder Morgan Inc.’s Sierrita Gas Pipeline LLC, which extends from the border near Sasabe, AZ. The project foresees initial construction of up to 4 mmty using modular LNG technology.
MPL Chairman Page Maxson said Shanda was hired for his “extensive LNG project development, construction and operations experience from senior leadership positions at some of the most prestigious North and South American LNG companies,” with the expectation that he would accelerate MPL's trajectory through final investment decision (FID) into the construction and commencement of operations.
The company expects to issue an FID this year.
Shanda previously was senior vice president of operations at Cheniere, the largest LNG exporter in North America. Prior to joining Cheniere, he was the senior project engineer, technical manager and plant manager for the Peru LNG liquefaction plant in Melchorita, Peru, which was the first LNG export project in South America.
"MPL is on track to become the leading Pacific Coast provider of North American LNG," said Shanda. "With major permitting completed for 12 mmty, the project offers substantial cost advantages, as it benefits from existing pipeline access to abundant and low cost natural gas supply and lower shipping costs to South America and Asia due to its west coast location. I look forward to working in Houston with the talented MPL team as we prepare to take FID and commence construction."
MPL is backed by Avaio Capital, a build-to-core infrastructure investment firm which in aggregate has completed more than $4 billion of equity transactions and $50 billion-plus in infrastructure development and construction projects across the water, transportation, digital and energy sectors.
The MPL project is one of two LNG export projects on Mexico’s Pacific coast considering FID this year, joining Sempra Energy’s Energía Costa Azul (ECA) liquefaction project in Baja California. Last year, ECA also received U.S. DOE authorizations allowing Sempra to export U.S.-produced natural gas to Mexico and then re-export it globally.
The two-phase ECA liquefaction project, a joint venture between Sempra subsidiaries Sempra LNG and Mexico unit Infraestructura Energética Nova (IEnova), would be built adjacent to Sempra’s existing ECA LNG receipt terminal near the city of Ensenada. The Sempra subsidiaries have already secured heads of agreement with Total SA, Mitsui & Co. Ltd. and Tokyo Gas Co. Ltd. to take capacity from Phase 1 of the proposed project. The three companies each potentially could purchase 0.8 mmty from Phase 1.