Mexico Pacific (MPL) will make a final investment decision on its expanded Pacific coast LNG export terminal in the second half of the year, the company told Argus.
"We increased the anchor phase of the project; the first three trains will be 14.1mn t/yr and we are working towards FID on the first two trains likely in the third quarter," Douglas Shanda, chief executive of Mexico Pacific Limited, told Argus.
MPL had originally planned a 14mn t/yr LNG export facility in Puerto Libertad, Sonora, on Mexico's Pacific coast, but this year's surge in global LNG demand amid the conflict in Ukraine and Europe's push to wean itself of Russian natural gas has seen the project scope double to 28.2mn t/yr.
"We have always seen LNG demand driven by a requirement for energy security in Asia but as the supply opportunities are soaked up by Europe in its new focus on energy security … we are seeing customers be a lot more aggressive in terms of timing and terms," Sarah Bairstow, MPL's chief commercial officer told Argus.
MPL expects to start construction of the terminal in the next "month or so," once it receives the project's LNG export permit — expected "imminently" — and converts the 14mn t/yr of memoranda of understanding into binding offtake agreements. The company has already signed offtake agreements for 8mn t/yr with clients including China's Guangzhou Development Group, a Guangdong provincial government-owned power and gas supplier.
The project will require 1.5 Bcf/d of gas — sourced from the Permian basin — which the company has already contracted from an undisclosed source. Grupo Carso's Sasabe-Samalayuca pipeline and Sempra Infrastructure's Sasabe-Puerto Libertad pipeline have large amounts of underutilized capacity and state-power company CFE is the anchor customer on those lines.
The project's location just 563km (350 miles) from abundant and cheaper gas supplies at the Waha hub in Texas would allow Asia-destined LNG exports to bypass the costs and increased time associated with the Panama Canal.
"We have access to this great Permian gas and we are the lowest landed cost of LNG into Asia against global benchmarks," Shanda said.
The project will compete against Sempra Infrastructure's 3.25mn t/yr Energia Costa Azul (ECA) LNG export project in Ensenada, Baja California. First LNG from the ECA project is expected at the end of 2024, some six months ahead of MPL's first LNG forecast.
