U.S. Gas Helps Mexican LNG Reach Asia

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Sempra Infrastructure operates the ECA export facility for LNG in Mexico. Still in the commissioning phase, minority partner TotalEnergies said it delivered the first batch of the super-cooled gas to Asia.

ECA Joins LNG Canada

Drawing on natural gas from U.S. shale basins, the Energia Costa Azul (ECA) liquefied natural gas (LNG) export facility is now the second such facility in North America that can deliver the super-cooled gas to Asian customers via the Pacific.

Construction at the facility on Baja California's Pacific Coast in Mexico started in 2021. Tracking the project since its inception more than 10 years ago, data from Industrial Info Resources show the plant will produce 3.25 million tons per annum (MTPA) at full capacity from a single liquefaction unit, or train.

Last week, TotalEnergies, which holds a 16.6% stake in the project alongside operator Sempra Infrastructure, said it shipped the inaugural cargo to an unspecified Asian consumer from the initial production of the ECA plant, which is still in the commissioning phase. That joins a handful of others along British Columbia that can tap into Asian economies.

"At a time of increased uncertainty in the global LNG trade, we are excited to begin shipping a new and reliable source of natural gas from North America's Pacific Coast to customers around the globe," added Justin Bird, the chief executive officer of Sempra Infrastructure.

TotalEnergies did not provide specifics about the volume or the destination. The company, the lone offtaker during the ramp-up phase, signed on to secure 1.7 MTPA of LNG from the project over the next 20 years.

ECA draws on feed gas from the Permian Basin in Texas and New Mexico. IIR Energy in its NATGAS Today report for Thursday showed U.S. natural gas exports to Mexico running at around 8 billion cubic feet per day (Bcf/d).

ECA received its first batch of feed gas in mid-April. Sempra Infrastructure in a separate report said the project will ramp up to completion later this summer, supported by long-term sales and purchase agreements.

Second Such Facility in North America

ECA joins LNG Canada to become one of the only facilities of its kind capable of delivering LNG to Asian economies from the Pacific Coast. LNG Canada delivered its inaugural cargo last year, with the Gaslog Glasgow vessel departing the export terminal in British Columbia for South Korea just last month.

"Due to its strategic location, it creates a competitive advantage for shippers from the facility, who have the unique ability to export U.S. natural gas to Asia and other Pacific Basin markets through the shortest shipping route, thus reducing transportation times, costs and uncertainty while providing customers with greater access to competitively priced U.S. natural gas," Sempra said of ECA.

Located in Mexico, the facility nevertheless falls under U.S. jurisdiction because it's exporting U.S. natural gas. The U.S. Department of Energy (DOE) in February said it would extend the export license by six months, though ECA beat that deadline with the inaugural export to Asia.

In a February filing with the U.S. Securities and Exchange Commission (SEC), meanwhile, Sempra announced it pulled the plug on the development of the Vista Pacifico project for LNG exports, which would have been a mid-scale facility located at the Port of Topolobampo in Sinaloa state in Mexico. Sempra said there was a "change in priorities." The facility would've produced 4 MTPA of LNG, with TotalEnergies also an offtaker. It was already supported by Japan's Mitsui and backed by the U.S. government for countries without a U.S. free-trade agreement.

By the Numbers

• 1.7 MTPA of LNG for TotalEnergies at ECA
• 3.25 MTPA from the entire facility

Key Takeaways

• Only two facilities offer shorter routes to Asia
• The ECA plant draws on Permian gas

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