US duo joins forces to develop new LNG terminal on Mexico’s Pacific coast

Huston-based energy company GFI LNG and Pilot LNG, a compatriot clean energy infrastructure developer, have teamed up to develop a small-scale liquefied natural gas (LNG) terminal in Mexico’s Salina Cruz on the Pacific side of the Panama Canal.

The two players are set to construct and operate an LNG bunkering and transshipment terminal in Salina Cruz, Oaxaca, Mexico as part of the Salina Cruz LNG joint venture (JV). Given its location on the Pacific side of the Panama Canal, the project is believed to be ideally positioned to supply North and Central American bunker and fuel markets.

The facility is expected to produce 600,000 gallons of LNG daily, or approximately 0.34 million metric tonnes per annum (mtpa), at full build-out, with operations scheduled to start in mid-to-late 2027. The front-end engineering and design development is planned for this quarter, followed by a 12-18 month development and permitting timeline, and a final investment decision (FID) in the second half of 2025.

“With long personal ties to the region, the GFI team is dedicated to helping bring infrastructure development to Salina Cruz and brings a critically necessary understanding and appreciation for the local community and government,” said Jonathan Cook, CEO of Pilot. “We are pleased to be working with GFI to help progress this project.”

The partners are designing the project to include modular, land-based liquefaction equipment and an optimized storage solution entailing a floating storage unit (FSU) with an estimated capacity ranging from 50,000 to 140,000 m3, which will be moored inside the newly expanded breakwater in the Port of Salina Cruz.

The domestic gas supply from the Veracruz Gulf region is meant to provide access to new markets along the Pacific Coast, which the JV considers “high-value”. This includes LNG marine fuel deliveries at the Pacific entry of the Panama Canal and into Southern California’s Long Beach and Los Angeles ports, sales into Central American power markets, and trucked volumes in the local region of southwestern Mexico.

“The infrastructure planned in Salina Cruz will not only provide LNG to growing markets seeking cleaner fuel, but will also bring millions in direct community investment to the region,” noted GFI owner Genaro Gomez. “We are pleased to be adding the LNG and marine expertise of Pilot to the development team. Thanks to our new partnership with Pilot, we look forward to bringing this facility to Salina Cruz.”

Pilot LNG is also developing the Galveston LNG bunker port (GLBP) in the Galveston Bay/Greater Houston port complex with Seapath. The permit applications for the proposed project, which includes natural gas liquids and refrigerant storage, feed gas pre-treatment facilities, a bunker vessel loading berth, and associated marine and loading facilities, were submitted for state and federal approval in April.

Another LNG terminal – Energía Costa Azul LNG – is being developed in Mexico’s Baja California. As Phase 1 is said to be 85% done, first LNG is expected in 2025, and start of commercial operations a year later. Phase 1 entails building a single-train LNG facility with the capability to export approximately 3.25 mtpa of LNG, while Phase 2 will see its expansion by adding around 12 mtpa of LNG export capacity with two trains and one LNG storage tank.