(Canary Media, 15.Feb.2024) — At least a half-dozen LNG export projects are underway in the country — but whether most are completed will depend on politics to the north.
Environmental activists have turned a spotlight in recent months on the rapid expansion of liquefied natural gas export terminals along the Gulf Coast of the United States, calling attention to the ramifications for nearby communities and the climate.
But another buildout of liquefied natural gas (LNG) export terminals is occurring farther to the south, and this one so far has faced less public scrutiny.
At least a half-dozen LNG export projects are in progress in Mexico, split evenly across the country’s east and west coasts. At least two of these facilities are under construction: New Fortress Energy’s Altamira plant in Tamaulipas, which is expected to begin operations in the next several months after its original startup date was pushed back last fall, and Sempra’s Energía Costa Azul plant at an existing LNG import terminal in Baja California. The remaining proposals are in earlier, and less certain, stages of development.
While the planned export terminals are located in Mexico, they will mostly process and ship natural gas that is sent in by pipeline from gas fields in the U.S., including the Permian Basin in Texas and New Mexico. Western drillers with large gas supplies and limited access to the Gulf have viewed Mexico as their most promising gateway to international markets ever since plans for terminals on the U.S. West Coast fell through.
The U.S. already exports more gas to Mexico than to any other country: Nearly one-third of all U.S. gas exports — just under 5% of total U.S. gas production — went to Mexico in 2022, federal data shows. Virtually all of it was transported by pipeline. Mexico, for its part, imports about twice as much gas from the U.S. as it produces domestically.
“Mexico is highly dependent on natural gas, and it is highly dependent on those natural gas imports,” said Diego Rivera Rivota, a senior research associate at Columbia University’s Center on Global Energy Policy. “Virtually all — 99% — of imports come from the United States, and in particular, from Texas.”
The U.S. averaged close to 11 billion cubic feet of LNG exports globally and 6 billion cubic feet of pipeline exports to Mexico per day in 2022. The combined capacity of the six Mexican export projects that are currently moving forward, by comparison, is between 5 billion and 6 billion cubic feet per day. If all of the proposed stages are completed, the new export capacity will amount to approximately two-thirds of Mexico’s current total daily gas demand.
“If some of these projects — not even all of them, but some of these projects — did come to fruition, then that would put severe stress on the flows and the existing infrastructure pipeline capacity in Mexico,” Rivera Rivota said. The emergence of an export market that uses gas from the U.S., he went on, could create “competition with domestic demand, as well as other potential LNG export projects.”
Federal analyses have repeatedly found over the last decade that increased U.S. LNG exports will result in higher prices for American consumers, despite also spurring more gas production. Because most of the LNG shipped out of Mexico will come from the U.S., its effects on the market will be felt across both countries.
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