First LNG cargo from Mexico’s Energia Costa Azul terminal heads to South Korea

The first LNG cargo exported from Sempra Infrastructure's Energia Costa Azul export terminal on the West Coast of Mexico is headed to South Korea, offtaker TotalEnergies confirmed July 9.

TotalEnergies' Pacific Success departed late July 7 with the first shipment bound for Asia. The vessel was underway in the Pacific on July 9 with its captain's destination still listed as open for orders, S&P Global Commodities at Sea data showed. Japan's Nikkei earlier reported South Korea as the tanker's destination.

TotalEnergies, which has a 16.6% stake in ECA, will be the sole offtaker from the single-train, 3.25 million metric tons/year project as it ramps up ahead of commercial operations. The French energy giant has a 20-year offtake deal for 1.7 million mt/year from ECA. The project is also backed by a 20-year contract with Japan's Mitsui for 800,000 mt/year.

Sempra Infrastructure maintained its timeline in a July 8 statement for reaching substantial completion of the project this summer and starting commercial operations shortly thereafter.

"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," Sempra Infrastructure CEO Justin Bird said.

The $2 billion project in Baja California sources feedgas from the US and started producing LNG in early June. It is Mexico's second LNG export project to come online and the first on the country's West Coast, following the startup of New Fortress Energy's Altamira LNG terminal in 2024 in the Gulf of Mexico.

Sempra Infrastructure is also developing an expansion of ECA that would add about 12 million mt/year of liquefaction capacity. The expansion project has yet to reach a final investment decision.

ECA beginning exports stands to offer a new source of supply to Pacific Basin markets reeling from production disruptions in the Middle East.

"The start-up of ECA LNG, whose strategic location provides privileged access to Asian markets, strengthens the quality of our integrated LNG portfolio in North America," TotalEnergies CEO Patrick Pouyanne said in a July 9 statement.

Global LNG spot prices remain elevated and volatile after an escalation in military attacks in the region, with the conflict continuing to constrain about 20% of global supply that normally passes through the Strait of Hormuz.

Platts, part of S&P Global Energy, assessed the August JKM benchmark price reflecting LNG delivered to Northeast Asia at $17.976/million British thermal units July 9, down 48.70 cents/MMBtu from the previous assessment but still about 68% higher than prewar levels.