July 16, 2018 [LNG World Shipping] - The Mexican state oil and gas company Pemex has invited bids for supplying a floating storage and regasification unit (FSRU) to import LNG through the port of Pajaritos on the country’s southeastern coast.
The facility would be Mexico’s fourth LNG import terminal, after Altamira on the east coast and Manzanillo and Costa Azul on the west.
Pemex is seeking a regas vessel with the capacity to process up to 4.5 mta of LNG. The successful bidder will install the FSRU and operate it for least five years.
Pemex will be the anchor customer for the regas terminal. The energy company has extensive refining, petrochemical and fertiliser manufacturing facilities at Pajaritos in Veracruz state.
The winning bidder will also be responsible for connecting the FSRU to the Pemex processing complex. This will necessitate constructing a 14 km, 24-inch diameter gas pipeline from the port mooring site to the Sistrangas network of Cenagas at Pemex’s Etileno Cangrejera gas processing plant.
The winner of the FSRU tender is set to be announced by Q3 2018 and would be expected to bring the terminal onstream within seven months of the award. Mex Gas Supply, the gas marketing affiliate of Pemex, will also tender for supplying LNG for the FSRU later in the year.
Mexican natural gas production has declined steeply in recent years, from a peak of 5 billion cubic feet per day (Bcf/d) in 2010 to 3.2 Bcf/d in 2017. Over the same period domestic consumption has doubled, from 4 Bcf/d to 8 Bcf/d, as new gas-fired power plants are commissioned.
Pipeline imports from the US have closed most of the growing gap to date, and are poised to continue to do so, as new north-south arteries currently under construction come online.
Nevertheless, LNG imports have a strategic role to play in Mexico, bringing gas to locations not well served by major pipelines and offering an alternative to reliance on US pipeline supplies. Mexico imported 4.8M tonnes of LNG in 2017, a 16.6% jump on a year earlier.
Ironically, the US has also rapidly become the leading supplier of LNG to Mexico, following the inaugural shipment from Cheniere Energy’s Sabine Pass terminal in Louisiana in 2016. Last year Sabine Pass provided 57% of Mexico’s LNG imports.
Given the current fraught political relationship with the US and the growing demand for gas in the Pajaritos region, Mexico believes the FSRU project is an eminently sensible solution.
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