New Fortress Energy (NFE) has agreed to supply the Mexican state-owned power producer CFE with the equivalent of 20,000-40,000 million British thermal units (MMBtu) of LNG via an import terminal, under construction at the port of Pichilingue, Baja California Sur. NFE said the regas terminal will be commissioned and start supplying gas to CFE in May 2021.
Once operational, the Pichilingue LNG terminal, situated just north of La Paz, will be the third of its kind in Mexico. The two others are Altamira LNG at the Gulf Coast and Manzanillo LNG on Mexico’s Pacific Coast.
Though NFE stated the LNG regas terminal at Pichilingue Port will be commissioned in early May, it has released little details on the terms of LNG delivery and storage on site.
Imported LNG set to fuel two CCGTs
Clear is that the regasified LNG will be used to fuel CFE’s combined-cycle gas power stations in La Paz and Baja California Sur. By turning to imported LNG, Mexico’s state power producer will be able to convert some of its power plants in the region from burning heavy fuel oil (HFO) to natural gas.
Wes Edens, chairman and CEO of New Fortress Energy said “We are pleased to support CFE’s transition to cleaner, more affordable and reliable energy. This contract will help create significant fuel savings and emissions reductions for the benefit of the people of Baja California Sur.”
First LNG imports to Baja California
The Pichilingue Port LNG regas terminal will bring natural gas to Baja California Sur for power generation for the first time. The state is situated in the lower part of the Baja California Peninsula and currently lacks adequate gas pipeline infrastructure so it has no access to gas supplies from other parts of Mexico or imported shale gas from the US state of Texas.
New Fortress has a similar import facility in Jamaica in the Caribbean using floating storage that began operations in 2016 and another project in Puerto Rico. The company is also working on a venture to supply regasified LNG to a 300 megawatts gas-fired power plant at Puerto Sandino in Nicaragua.