Sunday, May 19, 2024

AMLO: Mexico Pacific Limited to invest US $14B in Sonora LNG plant

President López Obrador said on Tuesday that the Houston, Texas, company Mexico Pacific Limited (MPL) will invest US $14 billion in a natural gas pipeline and liquefaction plant in the northern state of Sonora. 

“The good news is that the Pacific Limited company will build a gas pipeline and a liquefaction plant in Sonora, whose investment amounts to [US $14 billion],” the president said on his Twitter account. 

A CGI-render of the Saguaro Energia facility in Sonora
A CGI-render of the planned Saguaro Energia facility Mexico Pacific Limited already plans to build in Sonora. (Mexico Pacific Limited)

His office later clarified that López Obrador was referring to Mexico Pacific Limited. 

Last year, President López Obrador announced the same company would build an LNG production plant near the municipality of Puerto Libertad, Sonora, to be called Saguaro Energía. The plant represented a US $2.5 billion investment in Mexico, he said. 

While no details were given about this new pipeline and gas liquefaction plant AMLO referred to, MPL does have plans to construct an LNG production facility near Puerto Libertad, Sonora — the planned Saguaro Energía LNG plant — which, according to MPL’s application with the U.S Department of Energy (DOE), would export natural gas to Mexico from U.S. producers via existing cross-border pipelines.

Its application, which explained the entire transport chain from the U.S. to Mexico and then to Asia, did not mention building any new pipelines in Mexico.

Natural gas pipeline
The company already has plans to build a LNG production facility near Puerto Libertad, Sonora, that will export gas from the U.S. via existing cross-border pipelines in Arizona and then ship the final product by sea to Asia. (Depositphotos)

An update to MPL’s permitting with the U.S. government in January made clear that construction on the plant has not yet begun. 

It’s not entirely clear if the president was referring to the Saguaro Energia project or perhaps an expansion of it or, indeed, a new project. But the description Foreign Affairs Minister Marcelo Ebrard gave of his discussions with MPL officials earlier this week shares similarities with MPL’s description of the Saguaro project in its DOE application. 

Ebrard said he’d discussed with MPL “a considerable investment in liquefied natural gas,” and added that MPL will ship the resulting LNG “out of the Pacific, because its main market is in Asia.” 

Furthermore, a pipeline project in the state is already being undertaken by the Federal Electricity Commission (CFE), Carso Energy and Sempra Infraestructura, announced in February. However, the objective of that project is to increase the CFE’s electricity generation capacity in Sonora and Baja California. 

A red-and-yellow Kansas City Southern train
The president also spoke with Canadian Pacific Kansas City officials. He has expressed hopes that the CPKCS railroad line, which runs from Canada to Mexico, will extend into southern Mexico, linking up with the Maya Train project. (Kansas City Southern)

Also on Tuesday, President López Obrador said that the recently merged Canadian Pacific-Kansas City Southern railroad companies are considering a partnership with the federal government to offer connections to North America through the trans-isthmus corridor and the Maya Train. 

Currently, the railroad extends from the U.S. and Canada to central Mexico. 

“The president would like [CPKC’s rail network] to connect with the south of the country,” Ebrard said. 

Kansas City Southern Mexico’s president, Óscar del Ceuto, told Radio Formula that such a partnership would allow the company to make a “seamless” connection between Mexican ports and those on the eastern coast of the U.S. and Canada, which would benefit companies nearshoring to Mexico. 

CPKC officials told a Reuters reporter that they have “agreed to work together exploring how we can support the administration’s initiatives, including sharing out experiences, best practices, and technology” for two train lines being constructed by the government. 

With reports from Forbes and Reuters

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