Saturday, February 24, 2024

AMLO announces plans to build natural gas export hub at Veracruz port

The federal government is planning to build a US $4–$5 billion natural gas processing plant in the Gulf coast state of Veracruz, from where the fuel will be shipped to Europe, President López Obrador said Tuesday.

“We’re thinking about creating a liquefaction plant in Coatzacoalcos,” he told reporters at his regular news conference.

“It’s a plant that processes gas, freezes it in order to be able to transport it in ships to Europe. The gas arrives there frozen, and it’s regasified at another plant. Now that there is a lack of gas in Europe, we have this possibility,” López Obrador said.

He said that the government already has land for the project and will seek private sector involvement.

Mexico's president Lopez Obrador
President López Obrador’s announcement comes a week after he reportedly discussed Mexico stepping up cooperation on liquid gas with German President Frank-Walter Steinmeier. Germany is facing shortages due to a squeeze on supplies from Russia. Presidencia

The president’s announcement came a week after he discussed liquefied natural gas (LNG) supply with German President Frank-Walter Steinmeier in Mexico City. The German head of state told reporters that “the Mexican president offered to step up cooperation on liquid gas” but didn’t offer additional details.

Mexico doesn’t currently export LNG commercially, but López Obrador said that the supply for the proposed plant would be “guaranteed” as the country has “sufficient reserves of oil and gas.”

He didn’t say when construction of the plant might begin or when it would start exporting gas to Europe, which faces a supply squeeze as Russia has progressively cut off access to the fuel via pipeline. López Obrador did, however, say that construction of the plant and other proposed infrastructure projects would create a lot of jobs.

While LNG isn’t yet exported from Mexico, some private companies are preparing to do so. According to experts cited by the El Economista newspaper, Energía Costa Azul, a subsidiary of U.S. energy company Sempra, is the closest to commencing exports.

The Veracruz port city’s dominant economic sector is petrochemicals. deposit photos

It operates an LNG storage and regasification terminal in Ensenada, Baja California, and supplies gas to power plants and other industries in that state.

With reports from El Economista

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