Last week, Sempra Energy announced that its subsidiary Sempra LNG is interested in developing a second liquified natural gas (LNG) project in Mexico. The still subject to confirmation export facility would be called Vista Pacifico and would be located at Topolobampo in Sinaloa state.
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In this sense, Sempra LNG’s regional vice president Brian Lloyd said such a project would import natural gas from US shale basins and then re-export it as LNG. Moreover, Vista Pacifico would have an export capacity of 3-4 million metric tons per year.
Sempra LNG on its Mexico’s West Coast plans
Indeed, this proposed project adds to Sempra Energy’s Energia Costa Azul LNG project, currently under construction in Baja, California, Mexico.
Worth noting, Sempra LNG has been one of the American recipients of export permits from the US Department of Energy. Under this framework, those companies can export to nations with which the US has free trade agreements (FTA).
Moreover, Lloyd highlighted that Vista Pacifico comes as Energia Costa Azul’s Phase 2 most probably won’t have enough US-Mexico pipeline capacity. Therefore, we think we can move additional volumes off the West Coast of North America,” he said.
In fact, energy producers in the Rockies region are looking to Mexico’s Pacific Coast as a potential market option. Particularly as the outlook for a Western US export facility appears highly unlikely.
For instance, with Oregon’s Jordan Cove LNG project on pause due to regulatory setbacks, Mexico is more an attractive market option for stranded Rockies gas each time.
Accordingly, the Western States and Tribal Nations Natural Gas Initiative (WSTN) President Andrew Browning said that “the Energia Costa Azul plant is a prime opportunity for Rockies gas.”
Mexico’s West Coast – A future LNG hub?
Thus, the Energia Costa Azul project is just one of the various liquefaction terminals envisages for Mexico’s West Coast. Worth noting, until completion, the terminal would allow US gas exports to transit the Panama Canal and reach Pacific demand markets faster and with lower costs.
Moreover, several experts think that projects like ECA and Vista Pacifico could throw a lifetime to natural gas production in the Rockies region. Indeed, this area has been on the decline for years; particularly as producers have favored oil targets due to low gas prices.
However, more work is needed to build enough pipeline capacity; mainly to supply the second ECA LNG phase from the Rockies basins since it yet does not exist.
A similar challenge for Sempra LNG will be to operate in accordance with the company’s commitment to “green up” its LNG sites. For instance, it pledged to include carbon capture and sequestration technology at its facilities and provide emissions certificates to buyers.
In this sense, Lloyd said CCS is unlikely to be implemented at ECA’s site; but Sempra LNG may look into other carbon conversion options in Mexico. Thus, the company will use low-emissions gas turbines; particularly, to make ECA LNG one of the lowest carbon LNG terminals in the world.