Mexico’s state utility Comisión Federal de Electricidad (CFE) has clinched some preliminary agreements for LNG and natural gas infrastructure projects with Sempra Infrastructure, including a potential joint venture.

Sempra map

The liquefied natural gas and energy infrastructure arm of San Diego-based Sempra may create a partnership with CFE to reroute the Guaymas-El Oro pipeline in Sonora under the agreement. Guaymas-El Oro, part of the 510 MMcf/d Sonora pipeline system owned by IEnova, has been out of service since 2017.

CFE has been looking for a partner to create a pipeline segment to supply gas-fired plants in Baja California State, Mexico.

[Shale Daily: Including impactful news and transparent pricing for shale and unconventional plays across the U.S. and Canada, Shale Daily offers a clear snapshot of natural gas supplies for analysts, investors and global LNG buyers. Learn more.]

Sempra said the proposal also includes “a path forward” for its unsanctioned Vista Pacífico LNG terminal project at Topolobampo in Sinaloa State. Under the agreement, the parties agreed to define the “project’s configuration” to advance engineering and permitting.

Targeting Equity Partnerships

Vista Pacífico could have an initial export capacity of 3-4 million metric tons/year (mmty). Sempra has been targeting equity partnerships to strengthen Mexico projects including Vista Pacífico. TotalEnergies recently took ownership of one-third of the project.

CFE and Sempra have already signed a tentative agreement to explore developing energy infrastructure and LNG solutions in Mexico to support the country’s economic development agenda. In the latest round of agreements, the companies are considering an LNG terminal in Salina Cruz, Oaxaca.

“These development projects would allow CFE to potentially optimize the use of existing natural gas pipeline systems, provide additional sources of LNG supply for isolated markets in Mexico and continue to expand LNG supplies to the global market,” Sempra management said. 

“The agreements reflect Sempra Infrastructure and CFE’s commitment to continue advancing energy infrastructure projects that enhance the region’s energy security, promote North America’s energy integration, and foster economic growth and social wellbeing in the region.”

The Vista Pacifico and Salina Cruz agreements “are preliminary and nonbinding,” however. “These development projects, together with rerouting the Guaymas-El Oro pipeline, remain subject to a number of commitments to be satisfied…” 

These commitments may include feasibility studies, along with customer, construction and partnership agreements, necessary permitting, financing, board approval and reaching a final investment decision.  

Last month, President Andrés Manuel López Obrador said he hoped a 500 MMcf/d pipeline to feed the project could be built within the year. The pipeline would span the Tehuantepec Isthmus, from Chinameca, Veracruz, to Salina Cruz.

LNG projects in Mexico by U.S. firms that also include by New Fortress Energy Inc. and Mexico Pacific Ltd. LLC are advancing, despite tension over Mexico’s energy policies. 

López Obrador has dismissed U.S. allegations that his policies violate the United States-Mexico-Canada Agreement and unfairly tip the scales in favor of CFE and state oil company Petróleos Mexicanos.

Andrew Baker Contributed to this story.