LNG tanker Energos Princess has pulled up to New Fortress Energy Inc.’s floating storage unit at Altamira, Mexico, according to ship-tracking data from Kpler.
The vessel has a capacity of 160,000 cubic meters over four tanks. The ship had previously signaled it could head to Boston after loading, according to Kpler data.
U.S. Customs and Border Protection ruled earlier this year that transportation of LNG produced offshore Altamira by non-U.S. qualified vessels would not violate the Jones Act.
If liquefied natural gas were loaded onto the tanker, it would be Mexico’s first send-out of LNG and a new source of cross-border demand.
The company’s fast LNG (FLNG) facility uses feed gas supplied by the marketing arm of Mexico’s Comisión Federal de Electricidad (CFE), CFEnergía. Gas originates from the Agua Dulce hub in South Texas via the Valley Crossing pipeline. It then flows to Mexico along the Sur de Texas-Tuxpan undersea pipeline.
The project has seen months of delays. New Fortress CFO Chris Guinta said a late April malfunction with the FLNG facility’s cold box resulted in some minor injuries.
Crews last summer began installing the floating modules offshore the state of Tamaulipas. The first phase of the export project consists of two trains, each with 1.4 million metric tons/year (mmty) of capacity, hoisted on jack-up rigs.
“New Fortress has had their floating storage unit, the NFE Penguin, parked there for months,” Poten & Partners LNG analyst Sergio Chapa told NGI’s Mexico GPI in a recent episode of NGI’s Hub and Flow podcast. “And they reported first LNG already.”
Because the natural gas is sourced from the United States, New Fortress needs U.S. free trade (FTA) and non-FTA permits in order to operate. While it has its FTA permit, the company has been waiting for “more than two years for a decision on their non-FTA permit,” Chapa said.
The potential destination of Boston makes sense, given that New England has been facing record heat and its power sector has been under strain this summer.
Mexico’s next LNG terminal under development is Sempra’s 3.25 mmty Energía Costa Azul (ECA) Phase 1 project, which is set to begin exporting cargoes in summer 2025.
Nearly all of the other liquefaction projects planned for Mexico, however, could be impacted by U.S. President Biden’s permit pause.
Prices, Imports
North American natural gas prices have been in a slump this month, but managed to gain a little ground on Thursday on news that supplies might be dropping. New York Mercantile Exchange August contract prices were around $2.100/MMBtu late on Thursday afternoon.
Meanwhile, for the past 10 days through Thursday, Mexico imported 6.81 Bcf/d of pipeline gas from the United States, according to NGI calculations. That was a drop of 0.06 Bcf/d from the previous 10-day period as demand was hit during former Hurricane Beryl and its aftermath.
July’s current average cross-border flows have been very similar to April’s, according to NGI analyst Josiah Clinedinst “The weather in Mexico so far in July has been mild compared to June and May this year. There could still be some maintenance issues left over from Hurricane Beryl and Tropical Storm Alberto as well,” Clinedinst said.
He added that the Nueva Era pipeline is still not reporting flows, impacting Mexico flow data via South Texas pipelines.
Mexico Prices
In Mexico on Wednesday, natural gas cash prices at Los Ramones rose by 0.9 cents day/day to $2.157, according to NGI data. Monterrey via the Mier-Monterrey system was up 0.10 cents to $1.919. Tuxpan in Veracruz via Cenagas saw the spot price rise 0.7 cents to $2.927.
Out West, the Guadalajara natural gas price rose 0.7 cents to $2.407 on Wednesday. Farther north in El Encino, prices via Tarahumara were $2.407, 0.9 cents higher than the previous day.
On the Yucatán Peninsula, the cash price at Mérida was $3.843 on Wednesday, up 0.3 cents.
U.S. Storage
On Thursday, the U.S. Energy Information Administration (EIA) reported a 10 Bcf injection into storage for the week ended July 12. The figure sent natural gas prices higher.
The South Central region, close to Mexico pipelines, saw a draw of 10 Bcf that included a 9 Bcf decrease in salt stocks and a loss of 1 Bcf in nonsalts.
For the week ended July 12, total working gas in the U.S. South Central region stood at 1,173 Bcf, up from 1,149 Bcf for the same time one year ago. The figure was 136 Bcf higher than the five-year average of 1,037 Bcf.
