ARKANSAS, Sept 23 (Future Headlines)- Mexico’s energy landscape is undergoing a transformative shift with the imminent arrival of the country’s first floating liquefied natural gas (LNG) plant. The final critical component required to commence production at this groundbreaking facility is set to depart from a shipyard in Texas, according to a notice issued by the U.S. Coast Guard. This development represents a significant milestone for LNG developer New Fortress Energy (NFE), which is spearheading this innovative project.
The upcoming commencement of operations at the 1.4-million-tons-per-year floating LNG plant off the coast of Altamira, Mexico, marks a momentous step forward in Mexico’s energy sector. NFE has ambitious plans to initiate production in the coming weeks, with the first cargo from the project slated to depart in October, as previously announced in August. The first of three rigs essential for the operation of the floating LNG facility reached Mexican waters in late August, signaling the project’s progress. Last week, the second rig began its journey from the shipyard of Kiewit Offshore Services in Ingleside, Texas, contributing to the facility’s readiness.
This significant development is part of a broader initiative by New Fortress Energy and Mexico’s state-owned power utility, CFE, to create a comprehensive hub aimed at converting U.S. and Mexican gas into LNG for export. The total investment for this venture amounts to $1.3 billion. In addition to the facility currently nearing production, two more floating LNG plants are under construction, with plans for their operations to commence in 2025.
New Fortress Energy received a vital permit from Mexico in June, authorizing the export of up to 7.8 million metric tons of LNG through April 2028. Furthermore, the company had previously obtained authorization from the U.S. Department of Energy to export LNG to Mexico and other nations with which the U.S. has trade agreements. However, approval for exports to countries without free trade agreements with the U.S. remains pending.
The innovative approach adopted by New Fortress Energy to convert oil rigs into floating LNG plants is noteworthy. While traditional floating LNG facilities typically incur costs exceeding $4 billion and have construction timelines of up to five years, New Fortress Energy’s method is faster and more cost-effective, with an estimated cost of approximately $500 million. This pioneering endeavor, if successful, has the potential to facilitate entry into the thriving LNG market for numerous small gas producers. The LNG market has experienced heightened demand, particularly in the aftermath of Russia’s invasion of Ukraine, highlighting its strategic importance.
New Fortress Energy’s Chief Financial Officer, Christopher Guinta, recently shared that the company is on track to have a total of $3.2 billion worth of planned infrastructure operational within the next 90 days. This includes projects in Mexico and Brazil, reflecting the company’s commitment to advancing energy solutions in the region.
Mexico’s pursuit of a floating LNG plant represents a pivotal moment in the country’s energy journey. The imminent commencement of operations at the Altamira facility underscores Mexico’s ambition to diversify its energy sources and participate actively in the global LNG market. New Fortress Energy’s innovative approach, utilizing converted oil rigs, holds the potential to revolutionize LNG production by offering a faster and more cost-effective solution. This transformative venture aligns with the growing demand for LNG worldwide, driven by geopolitical developments and the need for cleaner energy sources. As Mexico advances on its path toward energy sustainability, its first floating LNG plant represents a significant stride forward.
Writing by Moe Khaled; Editing by Sarah White