Page 7 - GLNG Week 34

GLNG AMERICAS GLNG
Stabilis considering Monterrey as site for small-scale Mexican LNG plant
PROJECTS & COMPANIES
HOUSTON-BASED Stabilis Energy has said it is considering the Mexican city of Monterrey as a potential site for its rst LNG project in the Central American country.
Stabilis struck two deals last week that would extend the company’s reach south, as well as lay- ing the groundwork for building a liquefaction plant in Mexico. e small-scale plant would receive feedstock gas from the Eagle Ford shale formation in Texas, and would use tanker trucks to ship the liquefied gas on to customers in remote sites.
e move comes as the use of tanker trucks for hauling LNG to customers in Mexico is already growing in popularity. Indeed, Stabilis opened a liquefaction plant in the South Texas town of George West in 2015. e $55mn plant has the capacity to produce 120,000 gallons (454,249 litres) per day of LNG. It was initially focused on supplying LNG to power generators at remote drilling sites and sand mines in Texas, but has since started tapping demand in Mexico, where it has acquired a number of industrial and agricultural customers.
Over the past 18 months, Mexican company Enestas has being buying LNG from the Stabi- lis plant. Enestas delivered around 4mn gallons (15mn litres) of US LNG to its customers in Mexico in 2018, and anticipates selling 10mn gallons (38mn litres) of the fuel this year.
Now Stabilis is expanding its Mexican reach.
e rst deal struck last week saw Stabilis agree to buy Texas-based LNG marketing rm Diversenergy, which has several customers in Mexico. e second deal is a joint venture between Stabilis and CryoMex, a subsidiary of Monterrey industrial conglomerate Grupo CLISA.
“We see this as a huge opportunity for LNG
based on the market fundamentals down there,” Stabilis’ CEO, Jim Reddinger, was reported by the Houston Chronicle as saying. “We’re excited to have an in-country presence for both opera- tions and investment.”
While the nancial terms of the deals were not disclosed, Reddinger described the agree- ments as forming part of the company’s strategic push into Mexico. Stabilis estimates that over the next ve years, Mexican industrial and agricul- tural companies will consume up to 3mn gallons (11mn litres) per day of LNG, or roughly 1bn gallons (4bn litres) per year. Having struck the deals, the company is seeking to supply 900,000 gallons (3.4mn litres) per day of this demand, and has said that meeting this target may require multiple liquefaction facilities.
“ e fundamental fact is that Mexico is a lot less pipeline-rich than the United States, espe- cially when it comes to last-mile distribution pipeline,” Reddinger said. “ ere are a number of manufacturing facilities and mines that don’t have natural gas access. ere’s a much larger opportunity set down there on a relative basis to the United States.”
Stabilis is planning to obtain its feedstock gas from the Nueva Era pipeline, built by a joint venture between Grupo CLISA and Tex- as-based Howard Energy Partners. e pipe- line carries gas from the Eagle Ford shale to power plants in the Monterrey area and has excess capacity that can be used by customers such as Stabilis.
e company is also hoping to bene t from the fact that under certain cross-border mar- ket conditions, the LNG sold by tanker truck in Mexico can fetch a higher price in Mexico than it would in the US, though it remains cheaper than diesel south of the border.™
Stabilis opened a liquefaction plant in the South Texas town of George West in 2015.
The LNG sold by tanker truck in Mexico can fetch a higher price in Mexico than it would in the US.
Week 34 29•August•2019 w w w . N E W S B A S E . c o m
P7