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Mexico boasts more attractive economics, and in some ways, a more attractive regulatory climate for liquefied natural gas (LNG) export projects than the U.S. Gulf Coast, according to Mexico Pacific Limited LLC’s (MPL) Sarah Bairstow, chief commercial officer.

MPL is developing an LNG liquefaction project on Mexico’s Pacific coast in Puerto Libertad, Sonora state, which is authorized by the U.S Department of Energy (DOE) to re-export up to 12 million metric tons/year (mmty) of natural gas sourced from the United States and transported through Mexico via pipeline.

MPL estimates that the project’s proximity to burgeoning Asian and South American LNG demand centers will create cost savings of about 35% relative to export terminals on the U.S. Gulf Coast, which must send LNG tankers through the Panama Canal to reach Pacific markets.

MPL in March awarded a contract to Technip USA Inc. for the project’s front-end engineering and design (FEED), one of the final steps required before starting construction.

Speaking Thursday on a virtual panel at Industry Exchange LLC’s 6th Mexico Gas Summit, Bairstow said that “from an LNG markets perspective, Mexico isn’t as challenged as many other regions in the market. The regulatory regime is actually very strong and suits LNG exports.”

She explained that, “In Mexico, unlike the U.S, you actually receive your key permits first, so you get that confidence of community and government support for your project before you go and spend tens of millions of dollars on engineering and FEED to finalize your project.

“Obviously in the U.S., you do your FEED and engineering first, and you hope that you’ll get your permits.”


Need a refresher on how LNG trades? Listen NGI’s Hub and Flow podcast:

LNG 101: A Look at the Commercial Structures of U.S. Export Terminals and Why it Matters