Saguaro Energía LNG I and II are located in Puerto Libertad in Sonora, Mexico. The total project—to be developed in two phases—will offer Permian gas producers a relief valve for associated gas. (Source: Shutterstock/ Mexico Pacific)
Mexico Pacific Ltd. is working with financial advisers as it eyes a 2025 final investment decision (FID) on the anchor phase of the 30-million tonnes per annum (mtpa) Saguaro Energía LNG project on Mexico’s Pacific Coast.
The company is working with MUFG, Santander and JP Morgan to arrange the financing needed—likely a $15 billion investment—to support FID and the anchor phase of the liquefaction project, Patrick Hughes, Mexico Pacific senior vice president of government & external affairs, told Hart Energy.
“Each of them has significant experience and involvement in every major energy infrastructure project financing across North America in recent years,” Hughes said in an Oct. 23 email.
Quantum Capital Group is the controlling owner and lead sponsor of Mexico Pacific.
Saguaro Energía LNG I and II are located in Puerto Libertad in Sonora, Mexico. The total project—to be developed in two phases—will offer Permian gas producers a relief valve for associated gas and connect the U.S.’ cheapest gas to Asia, which will remain a key demand center for decades, Mexico Pacific said.
RELATED
Mexico Pacific Edging Saguaro LNG Toward FID to Move Permian Gas
Saguaro Energía I will include three 5-mtpa trains (15 mtpa of combined capacity). Saguaro Energía II would also include three 5-mtpa trains for another 15 mtpa of combined capacity.
Saguaro Energía I will source gas from Waha to be shipped along the 253-km Saguaro Connector pipeline on the U.S. side of the border. The Permian gas will then be shipped along the 802-km Sierra Madre pipeline on the Mexican side of the border.
Both segments of the LNG project will have the capacity to handle 2.8 Bcf/d of gas.
Houston-based Mexico Pacific has offtake agreements with Exxon Mobil Corp., ConocoPhillips, Shell Plc and Woodside Energy.
Additionally, Mexico Pacific made similar agreements with Asian players such as Posco International, Zhejiang Energy and GuangZhou Gas Group Co. Ltd.
All the agreements are indexed to the Waha and/or Henry Hub and include combined liquefaction and pipeline fees ranging from $2.50/MMBtu to $3.77/MMBtu, according to Poten & Partners.
Export terminals on Mexico's Pacific Coast would allow Permian LNG to reach new (or maybe Asian) markets, but certain headwinds keep developers from capitalizing on the Mexican Pacific Coast's access to international markets, according to Poten & Partners U.S. LNG Analyst Sergio Chapa.
Some include regulatory hurdles, a high-skilled labor shortage, limited natural gas pipeline capacity and in some cases, disinformation on social media, Chapa said.
Recommended Reading
Small-ball Deals Plentiful, but Prices Vary
2024-10-25 - Despite a smaller IPO market and a fiscal discipline mandate, many small players continue to find and make deals in the U.S. oil patch, panelists said during Hart Energy’s A&D Conference in Dallas, Texas.
Analyst: Public E&Ps Race to Stay Relevant in a Consolidating Energy Market
2024-10-25 - A shrinking pool of opportunities is leading to scarcity and driving the rising valuations for crude E&Ps in the current A&D market, said TD Cowen analyst David Deckelbaum at Hart Energy’s A&D Strategies and Opportunities Conference.
Northern Scores Early Mover Advantage with $2.6B Uinta Basin Deal
2024-10-24 - Northern Oil and Gas CEO Nick O’Grady said the Uinta Basin has stayed off the radar but a time may come when Utah’s best kept secret starts to heat up in the M&A market.
PE Firm KKR Buys Stake in Eni’s Biofuels Business for $3.2B
2024-10-24 - KKR will buy nearly a quarter of Eni’s Enilive, which values the biofuels unit at about $12.7 billion.
Crescent to Double, Largely Through M&A, in the Next Five Years, CEO Says
2024-10-23 - Crescent Energy CEO David Rockecharlie said that after closing the SilverBow acquisition, the company is continuing to hunt for new assets, although few make it past the company’s screening process.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.