(Energy Analytics Institute, 5.Nov.2024) — It’s another landmark moment for North American energy. That is, after Mexico shipped its madden LNG cargo this summer from a facility in Altamira, Mexico off the Atlantic coast. That shipment officially propelling the Latin American country into the LNG exporting club.
This milestone not only marks Mexico’s debut as an LNG exporter but also underscores Texas’ pivotal role in supplying feedgas for Mexico’s liquefaction and exporting needs.
Texas’ abundant natural gas, sourced from prolific plays like the Permian Basin and Eagle Ford shale, is a key driver behind Mexico’s LNG exporting ambitions.
Mexico’s Atlantic Coast and Altamira
Mexico’s initial leap into the LNG export space was made possible by and fueled by feedgas from Texas’ Agua Dulce hub. In specific, Mexico’s initial LNG export cargo flowed from New Fortress Energy‘s Fast LNG facility in Altamira.
There, the first phase of the Altamira project, FLNG 1, is authorized to export up to 1.4 million tonnes per annum (mtpa). The inaugural LNG cargo sailed in Aug. 2024 and a third sailed in late-Oct. 2024.
And, at the Altamira project, a second phase, FLNG 2, could further double the facility’s capacity to 2.8 mtpa by 2026.
RELATED STORY: New Fortress Completes 3rd Loading Offshore Altamira
Mexico’s Pacific Coast and five initial projects
While Mexico’s initial export capacity on its Atlantic Coast is modest compared to the US— which exports up to 86 mtpa— its potential for LNG growth is substantial when considering export capacity to come on its Pacific Coast.
There, five major projects could add capacity of 59.1 mtpa, according to data compiled by Energy Analytics Institute (EAI).
These projects include: Sempra Infrastructure‘s 15.3 mtpa Energía Costa Azul (ECA) project; Mexico Pacific Limited‘s 30 mtpa Saguaro Energía LNG; LNG Alliance‘s 7.8 mtpa Amigo LNG; Sempra Infrastructure’s 3 mtpa Vista Pacifico LNG; and Sempra Infrastructure and CFE‘s 3 mtpa Salina Cruz LNG.
ECA is on track to rank as Mexico’s second LNG project to commence exports. That’s not slated until spring 2026, and Sempra is apparently still lining up all its legos to make that happen, executives with the company told me in mid-Sep. 2024 during Gastech in Houston, Texas.
However, Mexico’s expansion faces hurdles, including political and logistical challenges, and an ongoing reliance on US gas imports. Nevertheless. Texas’ shale gas is set to sustain Mexico’s LNG growth trajectory as state-owned Pemex—alone in its current financial and operational state—will not be able to procure sufficient domestic feedgas resources.
RELATED STORY: LatAmNRG Matters” Podcast: Baker & Associates’ George Baker
Canada primed for initial LNG exports in 2025
Meanwhile, Canada, with its vast gas reserves, is poised to begin its LNG exports in mid-2025 from LNG Canada, executives with the joint venture project told me during Gastech. Canada’s entry into the LNG export club will further expand North America’s role as a leading LNG supplier on the global stage.
All summed, there are six LNG export projects slated for development in Canada with potential capacity of 50.3 mtpa, according to the Canadian government.
Initially, Canada is readying itself to become a powerhouse in the LNG exporting space with its LNG Canada project, located in Kitimat, British Columbia. Impressively, LNG Canada is a joint venture of five global energy companies with substantial experience in the LNG space—Shell (UK), Petronas (Malaysia), PetroChina (China), Mitsubishi Corporation (Japan) and KOGAS (Korea.)
LNG Canada has an initial export license for up to 14 mtpa (from two trains) over 40 years, and the madden LNG cargo is again slated to sail off in the first-half 2025.
A second phase of LNG Canada, again with two trains, could double the project’s capacity, taking it to 28 mtpa.
Thereafter, there are five additional projects possibly adding another 22.3 mtpa.
Canada’s six LNG projects include: LNG Canada JV’s 28 mtpa LNG Canada; Woodfibre LNG (2.1 mtpa); Ksi Lisims LNG (12 mtpa); Tilbury LNG (2.5 mtpa); Cedar LNG (3 mtpa); and Summit Lake PG LNG (2.7 mtpa).
So, as the global LNG market continues its rapid expansion, North America—propelled by US shale feedgas for US LNG projects, Texas shale feedgas for Mexican LNG projects and Canadian feedgas for Canadian projects—will solidify its standing in the LNG export space. This surge highlights Texas’ critical role in North America’s LNG journey, as its gas fuels both Mexico’s fledgling LNG market in particular and in general the continent’s broader energy ambitions.
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By Pietro D. Pitts, guest contributor. © Energy Analytics Institute.
