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New Fortress prepares for startup of Mexico LNG project as final unit ships to project site – Platts

  • 1.4 million mt/year export terminal to use US feedgas
  • Liquefaction facilities shipped to project site
  • Start of commercial operations targeted by early November
liquefied natural gas import terminal in the port of Pichilingue in Mexico’s Baja California Sur state.
LNG mport terminal in the port of Pichilingue in Mexico’s Baja California Sur state. (New Fortress)

Paul Corey, Platts S&PGlobal

EnergiesNet.com 010 04 2023

The final unit of New Fortress Energy’s floating LNG export terminal offshore northern Mexico appeared Oct. 2 to have arrived at the project site, according to S&P Global Commodities at Sea data, as the company prepared to begin startup work on the 1.4 million mt/year facility.

New Fortress is targeting the start of commercial operations “in late October or early November,” the company said Sept. 29. The project has yet to receive a key approval from the US Department of Energy, which could present an obstacle for New Fortress in beginning exports that soon from the facility, which is offshore the port of Altamira, in Tamaulipas state.

But if New Fortress reaches its goal for starting commercial operations in the coming weeks, the Altamira project stands to be a rare source of new LNG supply coming online in 2023, a year marked by a lack of new LNG export capacity coming online globally.

The third of three jack-up rigs that the export terminal will use departed from a US manufacturing yard on Sept. 26, the company said. The rig – the NFE Pioneer II platform – contains the equipment that will liquefy gas before its transferred to a floating storage unit. New Fortress said that upon arrival, the rig would join the previous two units at the project site for final installation and commissioning.

Tugs towing the rig had arrived by Oct. 2, according to the CAS data.

“The next milestone we are looking forward to is first gas,” New Fortress said in a video posted by the company Sept. 26 about the departure of the jackup rig. The timeline for introducing feedgas to the export facility was unclear.

New Fortress did not respond to a request for comment Oct. 3.

Fast LNG units

The Altamira project is the first of what New Fortress calls its Fast LNG units, which the developer has pursued as a way to meet global demand for LNG on a faster timeline and at a lower cost than it takes to build new onshore LNG export capacity.

The authorization that New Fortress is awaiting from the DOE would allow LNG exports from the project to countries that do not have free trade agreements with the US. The authorization is required because the Altamira project will be supplied by US feedgas. Countries that lack free trade agreements with the US represent most of the global LNG market, including major demand centers in Europe and in Asia, apart from South Korea.

The DOE is taking public comments until Oct. 23 on a draft environment assessment that the agency issued in mid-September. The agency will consider those comments in preparing a final environmental review used to help determine whether to authorize exports from the project.

New Fortress received the DOE’s approval in March to export a volume equivalent to 158 Bcf/year to Mexico, or about 43 MMcf/d, and to re-export the gas as LNG to other countries that have a free trade agreement with the US.

Once up and running, LNG tankers are expected to call on the facility about 40 times per year, according to the developer’s permit application at the DOE.

The floating LNG terminal will receive feedgas by using some of the Mexican State utility CFE’s underutilized firm pipeline transportation capacity on the 2.6 Bcf/d Sur de Texas-Tuxpan marine pipeline operated by TC Energy.

The proposed export point from the US would be Valley Crossing Pipeline in South Texas. The line is underutilized, with export volumes from January 2021 through May 2023 averaging about 900 MMcf/d, or about 35% of its total capacity, according to the DOE. The Valley Crossing connects with the Sur de Texas-Tuxpan pipeline system.

As part of the Altamira project, New Fortress also plans to transform the CFE’s LNG import terminal in Altamira’s port into an onshore 2.8 million mt/year export terminal. Those plans call for deploying the second and third 1.4 million mt/year Fast LNG units at the terminal in the second half of 2024.

spglobal.com 10 03 2023

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