Mexico Pacific plans Saguaro Energía final investment decision this year
Mexico Pacific Limited (MPL) expects to make a final investment decision this year on its US$14bn liquefied natural gas development in Mexico.
Located in Puerto Libertad on the coast of Sonora state, in its first phase Saguaro Energía will produce 15Mt/y of LNG from three liquefaction trains, mainly for export to Asia.
The company has missed its target of making an FID in the first half of this year. In the last week, a major offtaker and a pipeline developer cast doubt about the timing of the giant project.
"With three liquefaction trains commercially contracted, strong support from governments and capital markets, and key federal, state, and municipal permits in place across the Saguaro Energía LNG facility and the Sierra Madre pipeline, Mexico Pacific anticipates achieving FID in 2024," a company spokeswoman told BNamericas on Wednesday.
MPL has reached LNG offtake agreements with energy majors including ConocoPhillips, Shell, Woodside and ExxonMobil.
Earlier this month, ConocoPhillips said that the FID on Saguaro Energía was being delayed by the Biden administration's decision to halt approvals for LNG exports to non-free trade agreement countries. The administration is appealing a federal judge's ruling which overturned the moratorium.
MPL said it had secured export approvals before the pause was announced.
"Mexico Pacific's existing non-FTA approval covers all contracted volumes across the anchor three train project," the spokeswoman said.
Also this week, US pipeline company Oneok said it does not expect to start work in 2024 on a key pipeline which will supply Saguaro Energía with natural gas.
When the project receives the green light, Oneok will be responsible for developing and operating the Saguaro connector pipeline which will export about 2.8Bf3/d of natural gas from the Permian Basin to Mexico.
This new pipeline, which has been approved by US energy regulators, will connect with Mexico Pacific's planned 800km Sierra Madre pipeline for transport of the natural gas to the Saguaro Energía export facility.
"MPL is working on the project financing to make the final investment decision," Chuck Kelley, Oneok's senior VP of natural gas pipelines, said Tuesday during the company's Q2 earnings call. "We do not anticipate any material capital spend on our behalf in 2024… This is a commercially strong project with world-class customers and it makes great commercial sense," he added.
Saguaro Energía is one of a slew of LNG export projects in Mexico at various stages of development.
Earlier this week, US energy company Sempra delayed the start of commercial operations at its Energía Costa Azul LNG project in Mexico from the summer of 2025 to the spring of 2026, citing labor issues in Baja California.
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News in: Oil & Gas (Mexico)
Mexico Pacific signs up LNG customer in South Korea
The agreement with Posco International increases the chances of a positive investment decision for the US$14 billion Saguaro Energía project.
Gato Negro applies for new export permit for Mexican LNG
The project will import natural gas from the US and liquefy it for export from the port of Manzanillo in Colima state on the Pacific coast.
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