Mexico Pacific Working with Financial Advisors, Executive Says

Estimated read time 4 min read

(Energy Analytics Institute, 24.Oct.2024) — Mexico Pacific, which is developing the 30 million tonnes per annum (mtpa) Saguaro Energía LNG Facility on Mexico’s Pacific Coast and and the associated Sierra Madre Pipeline, continues with work related to a final investment decision (FID) for the first phase of the export project, an executive with the company told Energy Analytics Institute (EAI).

“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 is positioning the project for a final investment decision,” Mexico Pacific Senior Vice President, Government and External Affairs Patrick Hughes, said in a 24 Oct. 2024 email to EAI.

“We are currently working with our financial advisors – MUFG, Santander, and JP Morgan – to arrange the financing needed to support FID and transition to the next phase of development. Each of them has significant experience and involvement in every major energy infrastructure project financing across North America in recent years,” Hughes said.

 “We look forward to delivering world-class infrastructure that strengthens global energy security, reduces emissions, and improves the lives of millions of people around the world,” Hughes added.

Hughes also provided an update on Saguaro LNG covering the impact, government support, commercial interest and details about the Permian Basin, which will provide the feedgas for Saguaro LNG. 

Saguaro Highlights and Benefits

Impact

  • Mexico Pacific’s Saguaro Energía LNG Facility and Sierra Madre Pipeline represent the largest private foreign investment in Mexico to-date.
  • Together, they comprise a foundational pillar of the Sonora Plan that promotes clean energy development and investment.
  • Our anchor project is forecast to increase Mexico’s annual GDP by 25 basis points, creating thousands of direct and indirect jobs, providing a vital boost to local economies, and facilitating a brighter future for families across the regions we operate.

Development Philosophy and Government Support

  • Mexico Pacific is proud to be developing energy infrastructure – the right way.
  • We have aligned our approach to meet the high standards and economic, social, and environmental priorities of Mexico.
  • We have the strong support of the Mexican government, which was reaffirmed in meetings with President Claudia Sheinbaum and her cabinet on 15 Oct.
  • This commitment has fostered a strong partnership with and unprecedented support from the federal, state, and municipal governments of the country.
    • We are the first developer in Mexico to consciously design our assets and our shipping routes to avoid environmentally protected areas, indigenous populations, and population centers.
    • We are supporting skilled workforce development through training and apprenticeship programs to ensure local communities have ongoing opportunities to participate in the development of this important infrastructure project.
    • And, in partnership with CFE, Mexico’s state-owned utility, we will make unprecedented social investments in communities across northern Mexico.
  • These actions are designed not just to address immediate needs but to lay the groundwork for sustainable development and improved quality of life for current and future generations.

Commercial Interest

  • Commercial interest in Mexico Pacific remains extremely high across existing and prospective customers for deliveries primarily to Asia. We are actively engaged with counterparties that collectively represent more than 20 mtpa of incremental volumes (more than Trains 4-6). We expect LNG demand will continue to rise to meet the dual requirements of energy security and reliability around the world.

Permian Basin

  • The U.S. is home to the deepest inventory of low-cost natural gas in the world.
  • The Permian Basin has more than 600 Tcf of remaining resource.
  • U.S. natural gas production has doubled in the last 20 years; oil production has tripled.
  • Critically important is the fact that Permian Basin drilling is largely liquids-directed, meaning that natural gas produced is “associated” with oil production.
  • If we do not develop large-scale infrastructure to move the natural gas to market, producers must either flare the natural gas (environmental issue) or curtail production (economic issue).
  • Mexico Pacific’s infrastructure provides a large-scale solution for Permian producers – we are moving upwards of 3 Bcf/d of associated gas in our first phase alone – out of the Basin and to the west coast of North America, where our customers can monetize that gas in the global marketplace.
  • From our LNG facility, our customers are nearly two weeks closer to Asian markets – the engine room of global LNG demand – as compared to U.S. Gulf Coast locations, and are able to entirely avoid Panama Canal congestion.

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By Fidencio Casillas at Energy Analytics Institute. © Energy Analytics Institute (EAI). All Rights Reserved. 

ENERGY ANALYTICS INSTITUTE (EAI) https://energy-analytics-institute.org

Energy Analytics Institute (EAI), formerly LatinPetroleum (dba LatinPetroleum.com), is a Houston-established private organization with a satellite presence in Calgary and Mexico City. Since 1999, EAI has been a leader in energy news coverage of Latin America in particular. Coverage, run out of Latin America, now spans the world and encompasses nearly all energy and energy-related sectors.

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