Assuming the U.S. natural gas business continues its robust growth, Mexico is likely to shift from being an importer to an exporter of liquefied natural gas (LNG), Sempra Energy International CEO George Liparidis told participants Tuesday at the Wolfe Research Power and Gas Leaders Conference in New York City.
Liparidis shared a panel discussion on “Gas Infrastructure and the LNG Export Opportunity” with Dominion Resources CFO Mark McGettrick, who outlined the East Coast perspective on LNG exports. Dominion’s Cove Point, MD, LNG facility recently received export approvals (see Daily GPI,Sept. 12) and Sempra awaits a similar green light for its Cameron facility on the Gulf of Mexico in Louisiana.
“LNG for us has become a common thread — not only for our U.S.-based business, but for our international business, and what we’re doing internationally ties in nicely with what we have in the United States,” Liparidis said.
“Mexico now is an importer of LNG, but it very likely will become an exporter of LNG in the future as the gas business in North American continues to grow and evolve as it has in the past five years,” he said.
Emphasizing that Sempra’s priority is to build the export facilities at Cameron while its North Baja California import terminal in Mexico is fully contracted for, Liparidis nevertheless said “there are a lot of people looking for export opportunities in Mexico, and the priority is placed on a West Coast facility, and right now ours is the only brownfield site on that side of the country.”
Liparidis said there are infrastructure issues with potential LNG exports from Mexico’s West Coast, because there are a lot of pipelines that would need to be built to support a liquefaction facility. Meanwhile, Sempra is focused on Cameron and expects to get the necessary permits this year and early next year.
Liparidis said proposed reforms by the Mexican government to allow more private investment in the energy sector are a positive step.
“The real opportunity we see is in the infrastructure — the pipes, storage and treatment facilities — that are needed in Mexico, and there is going to be a strong emphasis by the government to have others do this so the Mexicans have more money to put into the exploration and production side.”
Liparidis said Sempra’s operations throughout Mexico make it more of a “local company” south of the border since its $1 billion IPO selling 19% of its Mexican-based company IEnova (see Daily GPI, May 6), so he thinks they are in a good position to capture a lot of the infrastructure business. “We are very optimistic about our chances,” he said.
In a similar vein domestically, Dominion’s McGettrick expressed optimism about his Cove Point LNG facility’s position to take advantage of the growing gas boom in the Marcellus and Utica shales, both of which are in relatively close proximity to the Maryland facility.
“We expect significant pipeline, gas and processing opportunities,” said McGettrick, estimating that only a fraction of the supplies available in the Utica have actually been drilled so far because of the lack of takeaway infrastructure there. “There is a huge backlog of opportunities in those two shale plays,” he said.
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