Owners of the stalled Saguaro LNG project in Mexico are seeking to extend their US Department of Energy (DOE) re-export permit to 2032, the latest setback for what was once Mexico's most ambitious LNG terminal.
The proposed facility in Puerto Libertad, Sonora state, could eventually export up to 30mn t/yr of LNG, or 1.52 Bcf/d, through six trains in two phases. This would rival Shell's 28mn t/yr LNG Canada project, which shipped its first cargo in June, and match the combined 29.5mn t/yr capacity of five other LNG terminals proposed along Mexico's Pacific coast.
In October 2024, project owner Mexico Pacific still expected a final investment decision (FID) by early 2025 for what President Claudia Sheinbaum had called "the largest foreign direct investment into Mexico to date." But market sources tell Argus that cracks are forming in political support for Saguaro, including at the state level in Sonora.
"It just has too many problems, and now I think the Sonora government is adding to these," said Eduardo Prud'homme, a former Cenagas official and partner at consultancy Gadex. Political backing for the project has gone silent since the October meeting with Sheinbaum, he said.
The proposed Sierra Madre pipeline, meant to link US Permian basin gas to the terminal, is also facing obstacles, including routes through areas controlled by criminal groups, protected ecosystems and indigenous lands. The pipeline was a cornerstone of the "Plan Sonora" initiative, launched in 2022 to create a cross-border lithium-based industrial hub.
A June report by the Institute for Energy Economics and Financial Analysis (IEEFA) highlighted internal turmoil at Mexico Pacific, including layoffs, changing project designs and shifting investors. The company relocated its headquarters from Houston to Mexico City, cutting dozens of staff in Houston and four employees in Singapore — who were responsible for marketing LNG to Asia, one source with knowledge of the matter said.
In April, former executive director Sarah Bairstow left the company to lead Woodside's LNG project in Louisiana. IEEFA and Prud'homme also pointed to growing pressure from environmental groups as a potential reason for officials to publicly distance themselves from the project.
IEEFA warned that even if internal issues were resolved, the project still faced "a tangled web" of external hurdles, including rising construction costs, contracting delays, regulatory risk, safety concerns and growing domestic opposition.
Mexico Pacific submitted its DOE extension request on 18 June, stating it would be "unable to meet the current deadline of 14 December" for starting exports under its current re-export permit. The DOE will accept comments through 8 August.
The firm said it has invested over $300mn in the project and signed binding long-term SPAs with ExxonMobil and ConocoPhillips for more than 12mn t/yr of LNG. It is requesting a new deadline of 14 December 2032.
As Saguaro stalls, Sempra Infrastructure's Energia Costa Azul (ECA) terminal near Ensenada is gaining traction. Its 3.25mn t/yr first phase is slated to launch in the second quarter of 2026, with a planned expansion to 12mn t/yr.
"They have got a big expansion under consideration," one Asian LNG market source told Argus. "If buyers want Mexican LNG exposure, ECA is the better option. The facility is real, Sempra is credible, and it is a US company."
