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In 2018, Mexico Pacific won DOE authorization to export up to the equivalent of 621 Bcf/year of U.S.-sourced natural gas to Mexico for end use in Mexico and/or, after liquefaction in Mexico, by vessel in the form of LNG from the proposed Saguaro Energía Facility.
The authorization included countries with which the US has in place a free trade agreement and countries with no such free trade agreement.
As amended, MXP’s export authorization extends through December 31, 2050.
DOE conditioned MXP to export LNG to non-FTA nations on its commencement of re-export operations using the planned liquefaction facilities no later than seven years from the date of issuance of the order, or December 14, 2025.
Over $300 million
MXP said in its extension request dated June 18 that the company and its various affiliates and subsidiaries “have, in good faith, made significant and concrete progress towards reaching a final investment decision (FID) on the Saguaro Energía facility.”
To date, MXP claims it has spent over $300 million in developing the facility and related infrastructure.
Last year MXP’s contractor Techint undertook early construction works, including but not limited to site clearing and grading activities, and terrain leveling activities in an area that will support the main construction activities.
In addition, MXP has entered into binding long-term sale and purchase agreements with LNG offtake customers, including large Permian Basin natural gas producers ExxonMobil and ConocoPhillips, for over 12 mtpa of the LNG to be produced at the Saguaro Energia facility, the company noted.
December 2032
“Despite MXP’s efforts to advance the project, however, due to circumstances and challenges outside MXP’s control, MXP will be unable to meet the current deadline of December 14, 2025 to commence export operations at the facility,” the company said.
MXP said the Covid-19 pandemic and associated economic downturn “adversely impacted” MXP’s ability to negotiate commercial and construction agreements.
In January 2024, MXP was also confronted with the Biden administration’s “pause” suspending DOE’s review and resolution of pending and future applications for authorization to export natural gas to non-FTA nations, the company said.
In order to take FID, MXP’s investors and lenders will require that all non-FTA nation export authorizations remain in full force and effect during construction of the Saguaro Energia facility and through commencement of the facility’s LNG export operations.
“It is therefore necessary for MXP to obtain an extension of the deadline for commencement of its LNG export operations,” the company said.
MXP anticipates that construction of all trains will take at least five years to complete after it achieves FID.
The company said it is “unlikely to be able to achieve FID before the fourth quarter of this year.”
MXP requests an extension of the current deadline to commence its export operations to December 14, 2032.
The company asked DOE to grant the requested extension and approve this application on or
before August 1, 2025.