Mexico's First Pacific LNG Plant Begins Output, Targeting Asian Buyers Amid Iran War Shortage

Sempra Infrastructure has started producing liquefied natural gas at the Energia Costa Azul (ECA) export terminal in Ensenada, Baja California, marking the launch of Mexico's first West Coast LNG export facility. The company confirmed first LNG production on June 4, 2026, after the single-train Phase 1 plant received feed gas from late April and moved through pre-commissioning earlier in the year.

The terminal carries a nameplate capacity of about 3.25 million metric tons a year. Long-term offtake is locked in under 20-year sale and purchase agreements with France's TotalEnergies and Japanese trading firm Mitsui and Co, which together hold 2.5 million tons a year. TotalEnergies takes roughly 1.7 million tons annually and Mitsui around 0.8 million tons. The facility re-exports United States natural gas, sourced mainly from the Permian Basin of west Texas and New Mexico, and is positioned on the Pacific coast to reach Asian and other Pacific Basin buyers directly without transiting the Panama Canal or the Strait of Hormuz.

The timing matters for a global gas market under heavy pressure. The Iran war has knocked a large share of world LNG supply offline, with Qatari export infrastructure damaged and output suspended, removing one of the largest sources of seaborne LNG from the market. Buyers in Europe and Asia have turned to the United States and other suppliers to fill the gap, pushing prices higher and tightening availability. The start of production at Costa Azul adds a new West Coast supply point that can deliver cargoes to Asia on shorter shipping routes, offering modest relief to a market struggling with scarcity.

Production at the plant is starting gradually. First LNG is the initial step ahead of substantial completion expected later in the summer of 2026, with commissioning cargoes set to follow before commercial operations ramp up under the offtake contracts. The plant has a window under its United States Department of Energy export authorization to begin shipments, after the company secured an earlier extension on that timeline.

The project reached its final investment decision in 2020, the only LNG export project worldwide to do so that year, and faced labor and productivity challenges in 2024 that pushed back its original schedule. Phase 1 sits next to the existing Costa Azul regasification terminal north of Ensenada, reusing storage tanks, the marine berth and associated infrastructure. A planned Phase 2 would add two more liquefaction trains and another storage tank, raising export capacity substantially, though that expansion would require additional permitting.

For supply chains, the new West Coast outlet improves the resilience of trans-Pacific gas flows at a moment when Middle East routes are disrupted. Asian importers gain access to North American gas without dependence on chokepoints affected by the conflict, while United States producers gain a new path to overseas demand. The volumes from a single train remain small relative to the supply lost from Qatar, so the easing effect on global prices is expected to be limited in the near term.