Energía Costa Azul

Mexico’s LNG sector has seen notable advancements in the past year, including new export project announcements and strategic investments. But many of the proposed LNG projects require extensive pipeline buildouts — no easy task south of the border and perhaps the biggest impediment most of the export projects face. In today’s RBN blog, we’ll look at where things stand with Mexico’s LNG sector and the export projects under development. 

Just a few years ago, Mexico was focused on importing LNG to help meet its natural gas needs, especially in parts of the country far from Permian and other U.S. supplies. Lately though, most of the talk about LNG in Mexico has been about liquefaction and/or exporting, not importing and regasifying, as evidenced by a final investment decision on the Energía Costa Azul liquefaction project in Baja California and progress on Mexico Pacific Ltd.’s liquefaction/export project in Mexico’s Sonora state. Both projects are aimed squarely at Asian markets, but yet another prospective LNG project “south of the border” is targeting bunkering, transportation, and industrial markets for natural gas along the Pacific side of Latin America — from Mexico itself down to Ecuador. In today’s blog, we discuss plans for what could be Mexico’s third major liquefaction project — this one aimed at both domestic and export markets.

Developers are scrambling to advance the next round of liquefaction/LNG export projects, primarily along the U.S. Gulf Coast. Earlier this month, LNG marketing behemoth Total SA signed initial agreements with Sempra Energy that would support Sempra’s efforts to add more liquefaction capacity at its Cameron LNG project in southwestern Louisiana and to build a liquefaction plant at its Energía Costa Azul LNG import terminal in Mexico’s Baja California state. A few days later, Total, Mitsui & Co., and Tokyo Gas signed heads of agreements for the entire capacity of the Mexican liquefaction project, propelling that project to the fore. Sempra also continues to pursue a third project: Port Arthur LNG. Today, we continue our series on the next round of liquefaction/LNG export terminals “coming up” with a look at Phase 2 of Cameron LNG, as well as Energía Costa Azul and Port Arthur LNG.