Singapore-based LNG Alliance Pte Ltd., sponsor of the proposed Amigo LNG export project in Mexico, signed a long-term offtake agreement with Malaysia’s E&H Energy SDN BHD, the companies said.
Under the deal, Amigo LNG – a 7.8 million metric tons/year (mmty) liquefaction terminal envisioned for the Port of Guaymas in Sonora state on Mexico’s Pacific Coast – would supply 3.6 mmty of liquefied natural gas to E&H Energy for the Malaysian market over 20 years beginning in the third quarter of 2027.
E&H Energy operates LNG and compressed natural gas facilities in Johor, and in 2018 became one of Malaysia’s first private companies to be awarded an LNG import license under the country’s gas market liberalization. “The future outlook of the Malaysian gas market is positive, driven by increasing demand for gas, particularly in the Malaysian power sector,” said LNG Alliance.
LNG Alliance has not yet reached a final investment decision on Amigo LNG, which would re-export pipeline gas imported to Mexico from the United States. It has, however, secured approval from the U.S. Department of Energy to send LNG to both free trade agreement (FTA) and non-free trade agreement (non-FTA) countries. A federal court in July ordered the Biden administration to end its pause on considering new requests for non-FTA LNG exports.
The Amigo project “is being developed in close cooperation with the state of Sonora and…is a cornerstone of Sonora's strategy to position itself as a hub for nearshoring, maritime decarbonization, and connectivity to Asian markets via Pacific shipping routes,” according to LNG Alliance.
The latest offtake agreement “is timely and aligns with [Malaysia’s] direction towards gas market parity by 2027,” said E&H Energy’s Dato' Wan Adlil, executive director. “E&H Energy aims to be a significant contributor in providing energy solutions to the country, particularly in the LNG and gas sectors in Peninsular Malaysia."
LNG Alliance’s Muthu Chezhian, CEO, added, “This partnership supports our strategy to focus on supplying the growing Southeast Asian LNG market and capitalizes on the unique logistics solutions that Amigo provides, optimizing shipping routes to the region.”
The Amigo project “underscores Mexico's national commitment to a sustainable future,” according to LNG Alliance. “One of the initiatives includes using biomethane produced locally from organic waste-based feedstock in Sonora, which will be processed and blended with imported U.S. natural gas. This approach reduces the project's carbon footprint through waste reduction and promotes a closed-loop circular economy.”
Mexico has about a dozen LNG export projects in varying stages of development, most of which would rely on feed gas sourced from the United States.
The Amigo news follows an announcement by New Fortress Energy Inc. (NFE) that it liquefied and shipped its first cargo from the newly completed Altamira Fast LNG terminal off Mexico’s Atlantic Coast. The NFE terminal also imports U.S. gas, via the Sur de Texas-Tuxpan offshore pipeline.
Sempra’s 3.25 mmty Energía Costa Azul Phase 1 terminal on the Pacific Coast, meanwhile, is slated to enter commercial operation next year.
