Houston-based Mexico Pacific is believed to be in negotiations to increase the price of LNG from its planned $15 bill Saguaro Energía export plant in Sonora state, Mexico with buyers.
According to Reuters, the company is in talks with Chinese buyers Zhejiang Energy and Guangzhou Gas to charge higher liquefaction fees, mainly due to a rise in the project’s construction costs.
The price being quoted by US engineering giant Bechtel to build Saguaro Energía has meant Mexico Pacific needed higher prices for its gas, according to the newswire..
This is seen as another setback to the 15 mill tonnes per annum export facility, which is the largest foreign investment proposed for Mexico but has not yet achieved a final investment decision (FID).
Mexico Pacific did not comment on the report.
As well as rising construction costs, Saguaro Energía is facing opposition from environmentalists who are concerned about the project's potential impact on the biodiversity of Baja California.
To be located on the Pacific Coast, the project aims to import shale gas from the US, liquefy it and then ship it to Asian markets without needing to transit the Panama Canal.
Mexico Pacific has claimed that the sailing time will be 11 days quicker to Asia from Saguaro Energía than from LNG plants on the US Gulf Coast, significantly reducing shipping costs.
Analysts have said that prospects for Saguaro Energía and other Mexican LNG projects have been blighted by concerns about the security of US natural gas supply to Mexico under the Trump administration, BNamericas has reported. .
Zhejiang Energy signed a sales and purchase agreement to offtake 1 mill tonnes per annum of LNG from Saguaro Energía in 2023, while Guangzhou signed a 2 mill tonnes agreement in 2022.
Other buyers have included ExxonMobil, Shell, ConocoPhillips, Woodside Energy and POSCO International.
