TotalEnergies ships first LNG cargo from Mexico's Energia Costa Azul

PARIS, July 9 – French oil major TotalEnergies TTEF.PA has shipped the first liquefied natural gas cargo from the Energia Costa Azul plant in Mexico destined for Asia, it said on Thursday, though full commercial operation has not yet been reached.

The 3.25 million tons per annum (mtpa) export facility is operated by Sempra SRE.N, though Total holds a 16.5% stake and will offtake 1.7 mtpa of LNG for 20 years once commercial operations begin in the fall. During the initial ramp-up phase, Total will be the sole offtaker of cargoes.

Global energy markets have been squeezed by the months-long halt in oil and liquefied natural gas tanker traffic through the Strait of Hormuz due to the U.S.-Israeli war on Iran, with smaller Asian countries hit hard due to a relative lack of domestic LNG storage.

Sempra and Total said the Mexican plant was at a competitive advantage due to its location, giving it the shortest seaborne route for U.S. LNG to Asia compared with other sites on the Atlantic Gulf Coast, which usually ship through the Panama Canal.

"At a time of increased uncertainty in the global LNG trade, we are excited to begin shipping a new and reliable source of natural gas from North America's Pacific Coast to customers around the globe," said Justin Bird, chief executive officer of Sempra Infrastructure.

Energia Costa Azul is the first LNG export plant on Mexico's Pacific Coast. The gas is sourced from sites in Texas and New Mexico.