Amigo LNG, a subsidiary of Singapore-based LNG Alliance, has reached a binding agreement with OQ Trading (OQT), the trading arm of Oman’s OQ Group, for the supply of liquefied natural gas (LNG) from its liquefaction facility in Guaymas, Sonora, Mexico.
The agreement is a major development for Amigo LNG, which aims to use its strategic location on Mexico’s west coast to meet the increasing demand for LNG in Asia.
The Guaymas facility, with a planned capacity of 7.8 million tonnes per annum (MTPA), is expected to play a crucial role in the company’s efforts to become a key LNG supplier to the region.
Muthu Chezhian, CEO of LNG Alliance, highlighted the importance of the partnership in a press statement, saying, “Securing the offtake agreement with a leading national oil company partner like OQ Trading strengthens our position as a reliable and responsible global energy provider.
“We are advancing rapidly in delivering the strategically located Amigo LNG project, expanding our portfolio of lower-carbon energy solutions to drive the energy transition, and we remain committed to supporting our customers and partners every step of the way.”
Wail al Jamali, CEO of OQ Trading, expressed optimism about the agreement, stating, “We are pleased to enter into this agreement with a trusted project developer in Amigo LNG. The offtake represents a step forward in the growth of our LNG portfolio, allowing us to deliver LNG to our customers within the Asia Pacific region.”
OQ Trading has established a global presence in the commodities trading industry, handling more than 40 million tonnes of energy products each year.
Mexico’s LNG exports
Mexico is emerging as a growing player in the LNG export market, with current exports at around 2.1 million tonnes in 2023. The country’s primary LNG export facility is the Altamira LNG Terminal on the Gulf Coast, with a capacity of 4.2 million tonnes per annum (MTPA). However, new projects are set to expand Mexico’s export capabilities.
Another major project, Costa Azul LNG near Ensenada, Baja California, is expected to begin operations in 2025, with an initial capacity of 3.25 MTPA, also focusing on Asia. The Vista Pacifico LNG project in Sinaloa aims to add up to 12 MTPA, further boosting export potential.
Mexico’s geographic location provides advantages for shipping LNG to Asia, reducing transit times compared to the US Gulf Coast. However, challenges remain, including the need for substantial infrastructure investments and regulatory support.
Asia’s LNG demand
Asia’s LNG demand growth is driven by economic expansion and energy transitions to cleaner sources. In 2023, China imported about 78 million tonnes of LNG, reflecting its shift from coal.
Japan remains a significant importer post-Fukushima, relying on LNG for energy stability. South Korea imported around 46 million tonnes, moving away from coal.
India’s demand is rising due to diversification efforts and infrastructure expansion. The IEA, Wood Mackenzie, and McKinsey project Asia’s LNG demand to increase by over 50% by 2030, highlighting the region’s importance for global LNG suppliers.
