Stabilis Energy LLC believes that Mexico’s small-scale liquefied natural gas (LNG) market could reach 3 million gallons/day (equal to about 248 MMcf) over the next five to 10 years, CEO Jim Reddinger said recently during a conference call with investors.

“For context, to meet this demand, it would require approximately 30 LNG liquefiers that are similar in size to our George West facility,” Reddinger said, referring to the company’s 100,000 gallon/day liquefaction facility in George West, TX, in the heart of the Eagle Ford Shale. “Needless to say, we see this as a significant growth opportunity.”

Last month, Stabilis announced the opening of an LNG transportation hub in Colombia, Nuevo León, Mexico, just across the border from Laredo, TX. The hub “will facilitate the delivery of up to 50,000 LNG gallons per day to our customers in Northeastern Mexico,” with LNG coming from the George West facility.

The hub “will increase supply security to Stabilis customers by reducing border crossing and related logistics risks,” the firm said.

The company’s current project development pipeline in Mexico, “which includes projects that we are actively bidding on or otherwise pursuing, includes over 900,000 LNG gallons per day of customer demand,” Reddinger said in December during the call with investors. He added, “These opportunities span from LNG delivery contracts to combined LNG production…storage and transportation projects. Some of these projects would come with firm take-or-pay agreements from customers, while others would be built to meet a portfolio of market demand.”

Reddinger said that Stabilis plans to file permits this month for several LNG production and storage projects in Mexico.

“These projects range from the installation of the 20,000 LNG gallon per day liquefier that we already own to the installation of new 100,000 gallon per day liquefiers, similar to the plant that we own and operate in Texas,” Reddinger said. “In addition to liquefaction, these projects will include LNG storage and truck loading facilities.”

The growth potential for small-scale LNG is underpinned by several factors, Reddinger said.

For one, the country has a large and growing economy that, despite a massive buildout of natural gas pipelines over the last several years, still lags far behind the United States in terms of connectivity.

Another factor, he said, is the higher cost of alternative fuels such as diesel, propane and heavy fuel oil, as well as trucking costs in Mexico that are “much more favorable” than in the United States.

Stabilis believes that permit approval for small-scale LNG projects in Mexico will take at least seven months from the time of submission, Reddinger said, explaining that, “We are submitting permits for sites where we have identified significant customer opportunities, and we will proceed with the construction of these sites when customer interest and importantly, customer commitments, provide adequate support for the projects.”

As part of the effort to expand its Mexico footprint, Stabilis announced in August the acquisition of LNG marketer and distributor Diversenergy LLC, and the formation of a joint venture with CryoMex Investment Group LLC, to seek LNG and compressed natural gas asset development opportunities throughout Mexico.