Mexico Pacific Ltd. LLC has reached an agreement with the government of Chihuahua state to advance the proposed 2.8 Bcf/d Sierra Madre natural gas pipeline.
Sierra Madre would supply Permian Basin gas from the U.S. border across the states of Chihuahua and Sonora to Mexico Pacific’s proposed Saguaro Energía LNG export terminal envisioned for Puerto Libertad on the Sonoran coast.
Under the agreement, “the government of Chihuahua will continue to pave an efficient path for the commencement of construction of this historic project in the coming months, marking yet another significant milestone in the progression of energy infrastructure for the state,” Mexico Pacific said.
Mexico Pacific has yet to reach a final investment decision (FID) on Saguaro Energía. However, it has secured offtake commitments from counterparties including ConocoPhillips, Shell plc and China’s Zhejiang Energy International Ltd.
The project’s first three trains, if sanctioned, would have a combined liquefaction capacity of 14.1 million metric tons/year (mmty) or 1.86 Bcf/d.
Chihuahua’s government has committed “to support Mexico Pacific in areas of mutual interest relating to the construction and operation of pipeline infrastructure in Chihuahua,” the firm said. “These include logistics, construction, technology, security, and community engagement,”
Mexico Pacific CEO Ivan Van der Walt said. “The state of Chihuahua has a skilled workforce and holds a promising future as a center of nearshoring excellence for cleaner energy and major capital projects. We are proud to have consciously designed our pipeline to avoid environmentally sensitive areas, indigenous communities, and population centers, a first for pipeline development in Mexico, demonstrating the ability for investment to co-exist with, and earn the trust and support of, the government and key stakeholders.”
Support from Chihuahua Gov. Maru Campos, along with state and municipal leaders along the planned pipeline route, “demonstrate the importance of Mexico Pacific’s investment in the state,” the company said. “Comprising a key part of the broader LNG project, the Sierra Madre Pipeline will bring employment opportunities, infrastructure development, community improvement, and economic growth to Chihuahua and the nation while positioning Mexico as the fourth-largest LNG exporting country worldwide, significantly contributing to global energy security.”
Mexico does not currently export liquefied natural gas. However, multiple projects are planned, with the goal of re-exporting pipeline gas imported from the United States.
Sempra’s roughly 3 mmty Energía Costa Azul (ECA) Phase 1 and New Fortress Energy Inc.’s 1.4 mmty Altamira Fast LNG project are the most advanced, and the only ones to have begun construction.
On the U.S. side of the border, Oneok Inc. is awaiting the Saguaro Energía FID in order to proceed with the 2.8 Bcf/d Saguaro Connector pipeline, which would connect the Waha hub in West Texas with MPL’s pipeline in Mexico.
“We see Mexico as the emerging LNG powerhouse in Latin America,” Poten & Partners Inc.’s Sergio Chapa, senior LNG analyst, said this week during the US-Mexico Natural Gas Forum in San Antonio, TX. He highlighted that in addition to ECA Phase 1 and Altamira, there are eight LNG export projects totaling 50.2 mmty proposed in Mexico. As a result, Mexico could become Latin America’s largest LNG exporter, Chapa said. Trinidad and Tobago currently holds that title, followed by Peru.
Speaking at the same event, Energy and Infrastructure Advisors’ Guillermo Turrent, general manager, said Mexico Pacific is likely to face difficulties completing a new pipeline to Puerto Libertad, due to a history of opposition to pipelines in northwestern Mexico.
