Page 4 - GLNG Week 40 2022

GLNG COMMENTARY GLNG

Details emerge about

Mexico’s LNG plans

ALTHOUGH Mexico does produce natural has suggested a tie-up with the 1.3 bcf (36.81
COMMENTARY gas, it does not extract enough to cover 100% mcm) per day Southeast Gateway pipeline pro-
of demand, which amounted to more than 9bn ject. He pointed to the port of Coatzacoalcos in
cubic feet (254.9mn cubic metres) per day as Veracruz State, one of the locations where the
of 2021. As a result, it is heavily dependent on pipeline is due to make landfall, and described it
imported supplies. as an ideal place for an LNG terminal.
More specifically, it is heavily dependent on This site would ensure adequate supplies of
overland pipeline shipments from the neigh- feedstock for an LNG plant, as it would allow
bouring US, especially from fields in the Texas access to a pipeline carrying large volumes of
section of the Permian basin. These deliveries gas from Texas, the president asserted. It would
account for most of Mexico’s imports, and they also give the terminal access to production from
now make up more than half of the country’s offshore fields, as Veracruz is Mexico’s biggest
consumption. Indeed, data compiled by the US gas-producing state, he said. He put the cost
Energy Information Administration (EIA) show of building an LNG plant at Coatzalcoalcos at
that US gas deliveries made up no less than 76% $4-5bn but did not say how long it might take
of Mexico’s total gas consumption on certain to build it or exactly how much LNG it might
days in mid-2021. turn out.
This dependence on imports has not discour- NGI also made note of proposals by the US
aged Mexico from cultivating dreams of becom- company New Fortress Energy (NFE) to use gas
ing a gas exporter, however. These dreams were pumped through the 2.6 bcf (73.63 mcm) per
put on display last month, when Mexican Presi- day Sur de Texas-Tuxpan pipeline to the port
dent Andres Manuel Lopez Obrador reportedly of Altamira in Tamaulipas State as a source of
told his German counterpart Frank-Walter feedstock for three Fast LNG units. NFE had
Steinmeier that the country was ready to help said earlier this year, after signing a letter of
Europe resolve its problems with respect to gas intent (LoI) with Mexico’s national oil company
supplies. (NOC) Pemex on the Lakach offshore gas pro-
Speaking during a state visit to Mexico City, ject, that it might eventually deploy as many as
Steinmeier told reporters that the Mexican pres- four Fast LNG units in the Gulf of Mexico. Only
ident had offered to provide assistance in supply- one of these 1.4mn tonne per year (tpy) units is
ing Europe with LNG. Lopez Obrador “offered supposed to go to the Lakach field, though, so
to step up co-operation on liquid gas,” he said the other three could be stationed at Altamira.
after a meeting in the presidential palace. If so, they would effectively establish a floating
At that time, neither Steinmeier nor Lopez LNG (FLNG) plant with a production capacity
Obrador offered any explanation as to what of 4.2mn tpy in about 14-16 months.
form such assistance might take. Since then, NFE has yet to strike a deal with the Fed-
however, more information has come to light eral Electricity Commission (CFE), Mexico’s
on what Mexico might be able to do on Europe’s national power provider, on this project. (CFE
behalf. This article attempts to provide a sum- will have to be involved because it is the only
mary of that information and a brief look at its party to hold capacity in the pipeline.) The US
implications. company is optimistic, though, as it has secured
a pledge from Mexico’s government to expedite
Gas and pipelines from Texas permits for the Fast LNG units. Additionally, it
One point that stands out is that for the most has noted that CFE stands to benefit from the
part, the plans are not based on the idea of ramp- project, as it is only utilising 20% of the pipeline’s
ing up Mexican gas production in order to meet capacity at present.
European gas demand. Rather, they are largely
based on the idea of gaining access to Mexican Mexican gas production
territory so that existing and planned gas infra- Meanwhile, NFE’s plans for restarting work at
structure can be used to deliver feedstock to gas Lakach are also slated to lead to LNG production.
liquefaction facilities on the coast of or within As previously mentioned, the US company
the waters of the Gulf of Mexico, whence LNG has indicated that it intends to station a 1.4mn
can be loaded on tankers and shipped across the tpy Fast LNG unit at Lakach, which lies off the
North Atlantic to Europe. coast of Veracruz State. Pemex is hoping to
For example, Natural Gas Intelligence (NGI) develop the field together with two nearby sites
reported in late September that Lopez Obrador known as Kunah and Piklis; altogether, the three

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