Mexico Pacific Ltd. LLC (MPL) continues to advance its liquefied natural gas (LNG) export project for the Pacific coast of the country.

MPL

This week, the company signed a collaboration agreement with ConocoPhillips LNG Licensing LLC and Bechtel. Together, the companies plan to work with construction firm Techint SA de CV to pursue “innovative lower carbon LNG design solutions” for potential future phases of the project.

The collaboration plans to further reduce baseline emissions by exploring “energy transition and greenhouse gas emission reduction” technologies developed by ConocoPhillips LNG and designed by Bechtel. This would include “carbon-advantaged gas feedstock” and “developing a commercial strategy for supplying carbon neutral LNG in the future,” said ConocoPhillips’ Tom Mathiasmeier, president of Global Gas, Power and LNG.

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With natural gas prices soaring in Asia, interest on the part of buyers in MPL’s Puerto Libertad project has picked up considerably. The LNG project would source gas piped from the Permian Basin to ship LNG from Mexico to Asian countries, bypassing the Panama Canal.

MPL CEO Doug Shanda told NGI’s Mexico GPI that “more than” 22 million metric tons/year (mmty) of binding offtake capacity is under negotiation for the project. Of that, 14 mmty is potentially contracted through signed memorandums of understanding.

Shanda said MPL is aiming to close binding offtake agreements for the first two trains by year’s end. A final investment decision (FID) is expected in early 2022.

“Our project will already achieve lower greenhouse gas [GHG] emissions than other projects through design and shorter shipping distance to Asia and our recently announced low carbon initiative for our future phases furthers our value proposition,” Shanda said. The project is progressing toward FID “with great momentum.”

The customer interest “oversubscribes the first phase of our project, and positions us to quickly pivot to focus on FID for Trains 3 and beyond.”

A combined capacity of 9.4 mmty could come online in 2025. A third train would bring capacity to 14.1 mmty. Longer-term, MPL is eyeing six trains for a combined 28.2 mmty.

Momentum For Low Carbon Options

“The MPL LNG Project will be a great example of how we, along with our customers and technology providers, can continue to supply LNG to offset traditional high emission fuels such as coal and others while developing and applying real innovations to meet the environmental goals of the industry,” said Bechtel Energy President Paul Marsden.

MPL is not the only company exploring low carbon options for LNG in Mexico. In July, the country received its first cargo of carbon offset LNG at Sempra’s Energía Costa Azul (ECA) terminal on Mexico’s Pacific coast. GHG emissions from the cargo were offset by BP Gas Marketing Ltd. retiring carbon credits sourced from its portfolio on behalf of Sempra LNG. 

The carbon-neutral LNG market is on track to quadruple this year, according to recent analysis by FTI Consulting. However, standards and methodology for defining carbon neutrality vary dramatically, researchers said.