Houston-based Transition Industries is set to begin construction of a US $3.3 billion blue and green methanol production facility on the Sinaloa coast after signing a natural gas supply contract with a subsidiary of Mexico’s state-owned Federal Electricity Commission (CFE).
The company announced on Monday that it had signed “a long-term firm natural gas supply contract” with CFEnergía for its planned Pacifico Mexinol project near Topolobampo, a port town southwest of Los Mochis.
“The contract signing with CFEnergía represents the final outstanding commercial milestone, enabling the start of the construction phase, and confirming the timeline for Mexinol’s operational readiness in late 2029 to early 2030,” Transition Industries said in a statement.
“… With the gas supply contract secured, Mexinol enters the execution phase, solidifying its position as a key project in the transition to net-zero emissions and establishing itself as a strategic industrial platform for innovation in Mexico,” the company said.
Transition Industries said that CFEnergía has agreed to supply “approximately 160 million cubic feet per day of natural gas over the long term, ensuring a critical input for Mexinol’s production of ultra-low carbon methanol.”
“The supply will be provided by CFEnergía at market prices and will optimize the use of existing infrastructure,” the company said.
“CFEnergía will source the natural gas from the USA. The agreement is subject to customary conditions,” it noted.
When the methanol plant begins operations, it is “expected to be the largest ultra-low carbon chemicals facility in the world,” Transition Industries said.
The firm said the facility will produce approximately 1.8 million tonnes of blue methanol and 350,000 tonnes of green methanol per year.
“With an investment exceeding USD 3.3 billion, its prime location on the west coast of Mexico meets emerging demand for clean methanol in the Pacific and beyond,” Transition Industries said.
The company first announced its intention to build the Pacifico Mexinol project in 2023. The International Finance Corporation, a member of the World Bank Group, and Australian investment bank Macquarie are partnering with Transition Industries on the project.
The project is supported by the Sinaloa government, but has been opposed by a local environmental group.
Transition Industries said that “Mexinol is committed to the highest environmental and sustainability standards, leveraging technology and innovation to treat and use municipal wastewater instead of seawater and other natural sources of water.”
“Mexinol will have no wastewater discharge into the Bay of Ohuira. Mexinol’s purpose-driven water strategy is designed to completely avoid impacting the Bay of Ohuira,” the company says on the Pacifico Mexinol website.
In its press release, the firm said that the project will support “the long term socioeconomic development in the local area” via the creation of “more than 6,000 jobs in Sinaloa during construction and at least 450 permanent jobs (direct and indirect) in operations.”
The company’s CEO, Rommel Gallo, said the project “further creates bilateral economic development through the creation of jobs in both Mexico and the U.S., and the export and consumption of more than US $4 billion worth of U.S. natural gas.”
A Japanese company will be the facility’s top customer
Transition Industries said that the Pacifico Mexinol project “positions Mexico as a reliable supplier of ultra-low carbon methanol to strategic markets in Asia, including Japan, while also boosting the development of the domestic market and the Mexican chemical industry.”
“Mitsubishi Gas Chemical (MGC), a world-class company based in Tokyo, has committed to purchasing approximately 50% of the project’s production,” the company said.
Transition Industries said that the project’s location near Topolobampo “strengthens its export profile, facilitates access to global markets, and improves its logistical competitiveness, while also boosting domestic market development and the integration of the national chemical industry.”
Methanol can be used as fuel, including by container ships, and has a range of other applications.
Mexico News Daily
