Mexico is cancelling a tender for a liquefied natural gas floating storage and regasification unit originally proposed for the Port of Pajaritos to alleviate gas shortages in the southern Gulf of Mexico state of Veracruz.
State energy company Petroleos Mexicanos (Pemex) and its natural gas supply subsidiary, Mex Gas Supply, launched the tender in July 2018 and it attracted leading LNG FSRU sector players.
The tender was for the chartering and installation of an FSRU for an initial period of five years with regasification capacity of more than 500 million cubic feet per day.
The FSRU at Pajaritos would have required 2.5 million tonnes per annum of LNG, while an additional 2 MTPA of cargoes would have been purchased on a quarterly basis as needed.
Pemex executives haven been told by the new Chief Executive of Pemex, Octavio Romero Oropeza, that LNG imports were no longer a priority as the company’s focus switches to producing more domestic natural gas.
Domestic natural gas production in Mexico has fallen by about 42 percent from its peak of 6.52 billion cubic feet per day reached in 2009.
Pemex is aiming to double production by 2024 to 5.7 Bcf per day, driven by associated gas, as part of a plan to reduce reliance on LNG and pipeline imports.
Mexican LNG imports are received at onshore terminals located at Altamira in the Gulf of Mexico and at Manzanillo on the Pacific Coast.
A third onshore terminal at Costa Azul, also on the Pacific Coast, is owned by Sempra Energy of the US.
However, Costa Azul imports have dropped off and Sempra is planning an LNG export facility, using feed-gas from imports originated in the US.
The Pajaritos FSRU had been planned to ease gas shortages in the southeast of the country, especially on the Yucatan peninsula, where the 485-mile Mayakan pipeline supplies five Federal Electricity Commission (CFE) combined-cycle gas-fired power plants.
The CFE has pointed to the imminent start-up of new natural gas pipelines from the US, including the subsea Sur de Texas-Tuxpan line crossing the Gulf of Mexico.
The Sur de Texas-Tuxpan subsea pipeline is a joint venture between North American company TransCanada Corp. and the Sempra subsidiary Infraestructura Energetica (IEnova).
The pipeline runs from South Texas to the Mexican port of Tuxpan and is scheduled to come on line in the first quarter of 2019 with capacity of 2.6 Bcf per day.
