Sempra, Mexico's Electricity Commission look to develop LNG terminal in Oaxaca
(Reuters) - Sempra Energy and Mexico's Federal Electricity Commission (CFE) said they signed deals to further develop gas infrastructure projects, including a possible liquefied natural gas (LNG) terminal in Oaxaca, amid sky high demand for the fuel globally.
The agreements come as Mexico tries to build facilities to take advantage of existing gas lines and promote the country as a key hub to export LNG from the Atlantic and Pacific coasts to Asia and Europe, where prices are currently considerably higher than in the Americas.
Sempra and CFE will also look to advance engineering and permitting for the planned Vista Pacifico LNG storage and export facility, expected to be located near Topolobampo in Sinaloa.
The agreements provide a framework for a joint venture that would ultimately restore service at the Guaymas-El Oro pipeline in Sonora, which due to damage has been inoperable since late 2017 and needs to be rerouted.
The pipeline is the second segment of a 500-mile (800-km) line that was designed to supply U.S. natural gas to Mexican government-owned power plants that are currently using fuel oil.
"These development projects would allow CFE to potentially optimize the use of existing natural gas pipeline systems, provide additional sources of LNG supply for isolated markets in Mexico and continue to expand LNG supplies to the global market," the companies said in a statement.
(Reporting by Arathy Somasekhar in Houston; editing by Richard Pullin)
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