Background and Relevance
The Mexican federal government has announced the resumption of the Amigo LNG export terminal project in Sonora, which will ship liquefied natural gas (LNG) from the United States to Asia via the port of Guaymas. This project is significant as it strengthens energy ties between Mexico and Asia, while also providing domestic benefits.
Who is Involved?
The Amigo LNG terminal project is a joint venture between the Mexican company of the same name, a subsidiary of LNG Alliance based in Singapore, and the National Port System Administration of Guaymas under Mexico’s Secretariat of Marina.
Project Details
Investment and Tax Revenue:
The project is estimated to cost $6.3 billion over 36 years, with the Mexican federal government set to benefit from tax revenues exceeding $68,000 million (approximately $4.0 billion at the current exchange rate) over the next 20 years.
Storage Capacity and Distribution:
The terminal will have a storage capacity of 1.3 million cubic meters of LNG, ensuring energy security for the country and increasing strategic storage from 3 to 5 days. The facility will span 36.2 hectares at sea and an additional 114 hectares on land.
Timeline and Operations:
Although the terminal is set to begin deliveries in November 2027, Amigo LNG issued a notice stating that operations will commence in the second quarter of 2028. The plant’s liquefaction gas processing facility will not only support exports to Asia but also facilitate domestic cabotage, supplying gas to southern Mexico.
Benefits and Impact
Muthu Chezhian, CEO of LNG Alliance, stated that 20% of the LNG arriving at the site will be distributed to southern Mexico. The gas produced by Amigo LNG is expected to be 35% cheaper than imported LNG from other countries.
Furthermore, construction of the Naco-Guaymas gas pipeline will commence from the Naco-Hermosillo gas pipeline system, under the ownership and operation of the National Natural Gas Control Center (Cenagas).
Key Questions and Answers
- What is the Amigo LNG project? The Amigo LNG project is a joint venture between Mexican and Singaporean companies to build an LNG export terminal in Sonora, Mexico.
- Where will the LNG come from? The LNG for export will be sourced from the United States.
- When will operations begin? Although the terminal is set to start deliveries in November 2027, Amigo LNG has stated that operations will commence in the second quarter of 2028.
- What are the benefits for Mexico? The project will ensure energy security, increase domestic gas distribution, and provide tax revenues for the Mexican government.
- How much will it cost and what tax revenue is expected? The project is estimated to cost $6.3 billion over 36 years, with the Mexican federal government set to benefit from tax revenues exceeding $68,000 million (approximately $4.0 billion at the current exchange rate) over the next 20 years.
