US-based gas company Mexico Pacific has announced that it has received support from the State Government of Sonora, Mexico, for its Saguaro Energia liquefied natural gas (LNG) project in the region.
The Sonora Government will aid the streamlining of construction for the project, facilitating access to necessary permits. The Saguara Energia project is set to begin construction later in 2023.
“We are pleased to enhance our strategic relationship with the Government of Sonora as we prepare to commence construction of our Saguaro Energia LNG facility,” said Ivan Van der Walt, Mexico Pacific CEO.
Van der Walt continued: “We appreciate the continued support of President López Obrador and Governor Durazo as we work together to position our project, and the State of Sonora, to lead the way in the production of cleaner, more affordable energy.”
President Obrador’s government has been involved throughout the process of developing the liquefaction plant, with the President himself having initially announced it.
The $14bn project will produce 15 million tonnes per annum of LNG across its three production trains. A further expansion to add another three trains to double output is also in development.
The initial stage of the project’s completion in 2026 is set to coincide with the start of Mexico Pacific’s long-term LNG contract with Shell. As part of the biggest LNG contract signed in 2022, Mexico Pacific will supply Shell with 2.6 million tonnes per annum from 2026 through to 2045.
The Saguaro Energia LNG project’s other main uptake agreement, a two million tones per annum export deal with China’s Guangzhou Development, will also take place from 2026 to 2045.
The LNG project’s position in the state of Sonora on Mexico’s Pacific coastline means the company will not have to utilise the Panama Canal to ship to the Asian market that it is prioritising. LNG exports to Asia from other companies such as Cheniere have been held up as a result of queues to enter the canal, exacerbated by low water levels caused by drought.
