Chihuahua government backs Mexico Pacific’s LNG infrastructure project

Energy company Mexico Pacific and the government of the Mexican state of Chihuahua have entered into a strategic collaboration agreement supporting the construction and operation of Mexico Pacific’s Sierra Madre Pipeline.

According to Mexico Pacific, the Sierra Madre Pipeline will originate at the border of the United States (U.S.) and Mexico transporting approximately 2.8 billion cubic feet per day (bcf/d) of natural gas across the states of Chihuahua and Sonora to the company’s Saguaro Energía LNG facility on the West Coast in Puerto Libertad, Sonora, Mexico.

The key points of the agreement include the state’s commitment to supporting Mexico Pacific in areas of mutual interest relating to the construction and operation of pipeline infrastructure in Chihuahua, such as logistics, construction, technology, security and community engagement.

The company said that as a part of a broader LNG project, the Sierra Madre Pipeline will bring employment opportunities, infrastructure development, community improvement and economic growth to Chihuahua and the nation while positioning Mexico as the fourth-largest LNG exporting country worldwide, significantly contributing to global energy security.

Ivan Van der Walt, Chief Executive Officer (CEO) of Mexico Pacific, commented: “We are pleased to formalize our strategic relationship with the government of Chihuahua as we continue to work together to realize the positive benefits this world-class energy infrastructure will bring to Chihuahua and the people of Mexico.”

“The State of Chihuahua has a skilled workforce and holds a promising future as a center of nearshoring excellence for cleaner energy and major capital projects. We are proud to have consciously designed our pipeline to avoid environmentally sensitive areas, indigenous communities and population centers, a first for pipeline development in Mexico, demonstrating the ability for investment to co-exist with, and earn the trust and support of, the government and key stakeholders.”

Maru Campos, Governor of the state of Chihuahua, stated: “This collaboration will allow us to position ourselves in the eyes of the continent as a more competitive and reliable region for future investments, and will make us the state that transports the most natural gas. I thank Mexico Pacific for their trust and assure them that we will provide the necessary conditions for the completion of this work that will benefit us all.”

To note, Mexico Pacific’s anchor project, the 15 mtpa Saguaro Energia LNG facility, is located on the West Coast of North America, and according to the company, it achieves significant cost and logistical advantages resulting in the lowest landed price of North American LNG into Asia by leveraging low-cost natural gas sourced from the nearby Permian Basin and a significantly shorter shipping route avoiding Panama Canal transit risk for Asian markets.

In July 2023, the project received support from the government of the Mexican state of Sonora. As part of the agreement, Mexico Pacific said the government of Sonora committed to continuing to pave an efficient path to commencing construction of the project, including the continued timely issuance of state and municipal permits.