Gas alone: Russia will help Mexico with the development of LNG infrastructure

Moscow and Mexico City are discussing the possibility of cooperation in the field of liquefied natural gas, Russian Ambassador to Mexico Nikolai Sofinsky told Izvestia. In particular, we are talking about the exchange of experience and technology, as well as the development of infrastructure projects. Mexico expects to become one of the top four LNG exporters in the near future, with several terminals in operation. Moscow is pursuing the same goal with plans to increase energy production to 100 million tons per year by 2035. What is the prospect of Russian-Mexican cooperation and how Moscow can expand the geography of LNG exports — in the Izvestia article.

Mexico and Russia discuss joint LNG projects

Moscow and Mexico City are discussing joint infrastructure projects in the field of liquefied natural gas (LNG), Russian Ambassador to Mexico Nikolai Sofinsky told Izvestia.

— The topic of LNG was raised during bilateral meetings with relevant Mexican agencies, including the Ministry of Energy. The possibility of exchanging experience and establishing working contacts in the field of LNG infrastructure with the prospect of participation of companies from both countries in future projects was discussed. Currently, cooperation between Russian and Mexican structures continues. Preliminary consultations are underway on investment initiatives and localization of technological solutions," the diplomat told Izvestia.

The Latin American state has demonstrated steady progress in the development of LNG infrastructure in recent years, and given the convergence of interests of both countries in energy issues, there is great potential for cooperation in this area, the ambassador noted.

Mexico is just beginning to enter the market of exporters of liquefied natural gas. However, according to experts, it may become the fourth largest supplier of this product to other countries after Australia, Qatar and the United States. In October 2024, the first LNG shipment of almost €35 million tons arrived from Latin America to Europe.

In May 2023, Mexican leader Andres Manuel Lopez Obrador announced the construction of natural gas liquefaction plants in three Mexican states. At least four such enterprises are currently at various stages of readiness in the country, which plan to supply LNG not only to Europe, but also to Asian countries. Mexico's convenient geographical location allows transportation without affecting the Panama Canal, which reduces the cost of the product and increases the speed of delivery, in some cases saving up to 10 days.

At the same time, Mexico City initially buys gas for liquefaction from the United States, from where it arrives from Texas via an 800 km long pipeline. The Mexican side has the right to supply LNG only to countries with which the United States has existing free trade agreements. Against the background of difficult relations between the two countries due to the migration crisis and Washington's tariff policy, the media wrote that Mexico wants to increase its own gas production in order to reduce dependence on its neighbor. It has the sixth largest reserves of shale gas in the world, but previous governments severely limited its production due to environmental risks.

The possibility of cooperation in the field of LNG would allow Moscow and Mexico City to increase the level of economic cooperation, and this could have a positive impact on the volume of trade between our countries. In 2024, it reached $1.3 billion, and the main Russian supplies were cast iron, steel, wheat, and rubber. The Russian Embassy in the Latin American country notes a special interest in cooperation between Mexican and Russian entrepreneurs. This was confirmed by the first Russia-Mexico business forum, held in the North American country in early April.

— Within the framework of the event, direct bilateral negotiations were organized with Mexican companies — potential consumers of products, technologies and services, as well as with representatives of local industry associations interested in establishing long-term cooperation. The participants unanimously noted the high prospects of the Mexican direction for Russian business, emphasizing the continued interest of Mexican companies in Russian products, technologies and investment opportunities," said Nikolai Sofinsky.

How can Russia expand its LNG export geography

Russia can offer not only technological solutions in the field of LNG infrastructure, but also, of course, the fuel itself. Russia is one of the top 5 global producers, and expanding the geography of LNG exports is certainly in the economic interests of the country.

— One of the important issues for Mexico right now is related to energy in general and gas in particular. Mexico is trying to resolve the issue of energy supplies in the longer term. And if Russia is ready to discuss the possibility of participating in the construction of receiving facilities, then why not. Mexico has needs, we have opportunities," Alexander Frolov, deputy director of the National Energy Institute, told Izvestia.

On the other hand, there are concerns that the United States will not want to give this promising area to Russia, Timur Almukov, an expert on Latin America, said in a conversation with Izvestia. Against this background, the United States can offer Mexico more favorable terms. In this case, you can pay attention to other Latin American countries. The Dominican Republic, Brazil and Chile are the leaders in LNG imports in this region.

— This is a significant sales market. Globally, it is the third largest. In the context of the region, Russia could increase LNG exports to Brazil," notes Alexander Frolov.

For the first time, a batch of LNG was delivered to Brazil in 2018. Russia has previously exported small amounts of energy resources to Argentina and Puerto Rico.

Indeed, unlike conventional gas, liquefied natural gas can be transported anywhere in the world without the need for a gas pipeline between the exporter and importer. In the context of attacks on Russian gas pipelines, LNG represents a good alternative and opens up access to more markets.

According to the plans of the Ministry of Energy, by 2035, Russia will have to reach volumes of 100 million tons and, thus, occupy 20% of the global market. According to the results of last year, exports of liquefied natural gas from the Russian Federation increased by 4% compared to 2023, thus reaching 33.6 million tons. At the same time, more than half of exports went to the European market, and growth occurred despite the sanctions pressure. France bought the most fuel from Russia (6.3 million tons), followed by Spain (4.8 million tons), Belgium (4.4 million tons) and the Netherlands (1.3 million tons).

Asian countries became another point for the export of Russian LNG: they accounted for 45% of all supplies. China (7 million tons) and Japan (5.7 million tons) bought the most. The Asian region represents a prospect for increasing LNG exports, since, according to experts, resource consumption here should double by 2050, and in this case, the capabilities of traditional fuel suppliers to the region — Qatar and Australia — may not be enough. For your information, in 2024, the demand of the countries of the region for imported LNG reached 270 million tons. As Izvestia found out earlier, the Philippines and Thailand are among the countries interested in purchasing Russian LNG.

If we talk about the prospects of expanding the geography of exports in the Asian region, then entering the Indian and Pakistani markets may be of interest, Alexander Frolov notes. Last year, India increased LNG imports by 26% to 27.869 million tons (from 22.141 million tons in 2023). With this indicator, it surpassed the largest importer of LNG in Europe, France (23 million tons in 2023 and 20 million tons in 2024). As for Pakistan, in August 2024, it was reported that Islamabad was negotiating with Moscow on long-term LNG supplies.