MPL considers low carbon LNG for Puerto Libertad in Mexico, switches to FID


Mexico Pacific Ltd. LLC (MPL) continues to advance its project to export liquefied natural gas (LNG) to the country’s Pacific coast.

This week, the company signed a collaboration agreement with ConocoPhillips LNG Licensing LLC and Bechtel. Together, the companies plan to work with construction firm Techint SA de CV to research “innovative low-carbon LNG design solutions” for potential future phases of the project.

The collaboration plans to further reduce benchmark emissions by exploring “energy transition and greenhouse gas emission reduction” technologies developed by ConocoPhillips LNG and engineered by Bechtel. This would include a “carbon friendly gas feedstock” and “developing a business strategy to deliver carbon neutral LNG in the future,” said Tom Mathiasmeier of ConocoPhillips, president of Global Gas, Power and LNG.

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With soaring natural gas prices in Asia, buyer interest in MPL’s Puerto Libertad project has grown significantly. The LNG project would source gas from the Permian Basin to ship LNG from Mexico to Asian countries, bypassing the Panama Canal.

MPL CEO Doug Shanda said Mexico GPI of NGI that “over” 22 million metric tonnes / year (mmty) of mandatory off-take capacity is being negotiated for the project. Of this total, 14 mmty are potentially contracted through signed memoranda of understanding.

Shanda said MPL intends to reach binding off-take agreements for the first two trains by the end of the year. A final investment decision (FID) is expected in early 2022.

“Our project will already reduce greenhouse gas emissions [GHG] emissions than other projects through the design and shorter shipping distance to Asia and our recently announced low carbon initiative for our future phases strengthens our value proposition, ”said Shanda. The project is progressing towards FID “with great momentum”.

Client interest “oversubscribes the first phase of our project and positions us to pivot quickly to focus on FID for trains 3 and beyond”.

A combined capacity of 9.4 mmty could be commissioned in 2025. A third train would increase the capacity to 14.1 mmty. In the longer term, MPL is considering six trains for a total of 28.2 mmty.

Momentum for low carbon options

“The MPL LNG project will be a great example of how we, along with our customers and technology providers, can continue to supply LNG to offset traditional high-emission fuels such as coal and others while developing and applying real innovations to achieve industry environmental goals, ”said Bechtel Energy President Paul Marsden.

MPL is not the only company exploring low-carbon options for LNG in Mexico. In July, the country received its first cargo of carbon-compensated LNG at the Energía Costa Azul (ECA) terminal in Sempra on the Pacific coast of Mexico. The cargo’s GHG emissions were offset by the withdrawal by BP Gas Marketing Ltd. carbon credits from its portfolio on behalf of Sempra LNG.

The carbon-neutral LNG market is set to quadruple this year, according to a recent analysis by FTI Consulting. However, the standards and methodology for defining carbon neutrality vary widely, the researchers said.

About Jun Quentin

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