Mexico President Andrés Manuel López Obrador on Friday touted progress on numerous private and public sector energy projects under development in the country.
On Thursday, the administration concluded meetings with 16 U.S. energy companies to discuss “matters of electricity as well as oil and gas,” the president told reporters during his morning press conference.
Among the projects discussed was a liquefied natural gas (LNG) export terminal under development by Mexico Pacific Ltd. LLC (MPL) in Puerto Libertad, Sonora.
López Obrador, better known by his initials AMLO, indicated that authorities have granted approval for the project.
The project’s first two trains are expected to have a combined liquefaction capacity of 9.4 million metric tons/year (mmty). The terminal would source gas from the Waha hub in West Texas for export to the Asia Pacific region.
“In Puerto Libertad, an investment of about $2 billion was authorized” for the liquefaction plant, López Obrador said during a morning press conference. MPL has yet to announce a final investment decision (FID) for the project.
The president did not go into detail on what type of authorization had been granted. MPL’s CEO Doug Shanda, however, told NGI in late 2021 that a natural gas export permit from Comisión Reguladora de Energía (CRE) was the project’s final pending regulatory hurdle.
China’s Guangzhou Development Group Inc. disclosed earlier this year it had signed a 20-year binding offtake agreement with MPL for about 2 mmty from the proposed terminal.
The president on Friday also touted progress being made by Sempra on the 3.25 mmty Energía Costa Azul Phase 1 liquefaction terminal, which is slated to enter service by end-2024.
Additionally, López Obrador highlighted efforts to shore up supply of natural gas and electricity in the Baja California and Yucatan peninsulas, two areas that have historically been isolated in energy terms from the rest of the country.
In Baja California, state power company Comisión Federal de Electricidad (CFE) recently launched a tender to improve natural gas infrastructure. New Fortress Energy Inc. also brought online a small-scale LNG import terminal in Baja California Sur that supplies about 20,000-40,000 MMBtu/d of LNG to CFE power plants.
In the Yucatan, López Obrador highlighted two combined-cycle natural gas plants under development by CFE in Mérida and Valladolid with a combined capacity of 1,500 MW.
“With these two plants and with the gas pipeline that is being reinforced and in fact, expanded, the peninsula’s problem is resolved.”
The pipeline is Engie SA’s 250 MMcf/d Mayakan system, which was recently connected to the Sistrangas national pipeline grid via the Cuxtal I interconnect.
In a panel discussion last week moderated by NGI’s Christopher Lenton, senior editor for Mexico and Latin America, Engie’s Eva Ribera, vice president of business development, said that while the interconnection was good news, the peninsula still does not have enough gas to meet demand.
If the government finalizes plans to expand the Sur de Texas-Tuxpan pipeline, then Engie plans to double Mayakan’s capacity, Ribera said.
In both peninsulas, “we are already working and will guarantee the permanent supply of electricity,” López Obrador said.
[Mexico Outlook: A perfect storm emerges as natural gas markets are rocked by surging post-pandemic demand, constrained production growth and Russia’s invasion of Ukraine – propelling Mexico’s natural gas prices skyward. Download NGI’s Special Edition to understand Mexico’s natural gas outlook in the months and years ahead.]
In the upstream segment, López Obrador said that state oil company Petróleos Mexicanos (Pemex) is nearing an agreement with Houston-based Talos Energy on a development plan for the Zama shallow water discovery.
A Talos-led consortium made the discovery in 2017, but under López Obrador energy ministry Sener transferred operatorship to Pemex, since the oil deposit is partially located in a neighboring Pemex block.
López Obrador said Friday that he assured Talos management that their investment will be protected, and that they will receive “reasonable profits” from oil produced at Zama.
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