Mexico’s Vista Pacifico cancelled, dimming hopes of LNG exports

Sempra Infrastructure has terminated its agreement to develop the Vista Pacifico LNG project, ending its bid to develop one of the signature LNG export proposals for Mexico’s Pacific Coast. With its cancellation, the odds of Mexico becoming a major LNG exporter look increasingly dim.

In recent years, a series of proposed LNG projects for the western coast of Mexico have proliferated, with developers seeking to capitalize off of what they viewed as insatiable Asian demand for gas. Unable to build LNG projects on the U.S. West Coast, LNG developers thought they had found a workaround, exporting American gas to Asia through what appeared to be a backdoor in Mexico.

The concepts all relied on shipping U.S. gas, mostly from the Permian basin, into Mexico, where it would be liquified, put onto a tanker, and shipped to markets in China, Korea, Japan and other Asian economies. Shorter shipping distances, and a direct route that does not depend on the Panama Canal, offered competitive advantages. 

But from the get-go, the concepts all faced daunting commercial obstacles. As Gas Outlook explored in a series of investigations in early 2025, a long list of political, financial, regulatory, and even security risks stood in the way of many Pacific LNG projects breaking ground. In the intervening 12 months since publication, those problems have only grown more challenging.

Permitting delays on both sides of the border have set back project timelines. Worsening trade tensions have increased investor risk. Labour shortages and construction cost inflation threatened to lead to significant cost increases. Demand growth for LNG in Asia slowed down dramatically, and a long-anticipated global supply surplus appeared imminent.

As the largest of the proposed Mexican projects, Saguaro LNG, in particular, faced heightened expectations and one crucial vulnerability. It required a brand-new long-distance pipeline that would run from the U.S. border to the coast of the Gulf of California, and it would need to be built across the Sonoran Desert, through areas contested by cartel violence.

The mounting risks prevented many projects from securing the financing needed to move forward. Not only did major financial institutions steer clear, but even the western oil majors — many of which had substantial equity stakes in LNG projects on the U.S. Gulf Coast or Pacific Coast of Canada — could not be convinced to underwrite risky LNG projects in Mexico.

After hyping an early-2025 FID, Saguaro LNG pushed back its timeline. Its CEO, Sarah Bairstow, quietly left the company, and progress has stalled.

The two-phase, 30 mtpa Saguaro LNG was the linchpin of the push to build Pacific Coast gas exports in Mexico. Its struggles have cast a cloud of uncertainty over the entire commercial case for Mexican LNG.

A little further south in the state of Sinaloa was the Vista Pacifico LNG project. With a smaller capacity, per-unit export costs would likely be higher, although construction risk would be lower. Working in its favour was the fact that it did not need a long-distance pipeline, but would instead use existing pipeline infrastructure.

Still, it was not enough. In late February 2026, a key permit was denied by Mexican regulators. Shortly after, a securities filing that Sempra Infrastructure had submitted in December was made public, revealing that the company had pulled the plug on the project.

“The termination of the development agreement between Sempra Infrastructure and CFE was due to a change in both parties’ priorities,” a spokesperson for Sempra Infrastructure told Gas Outlook.

Gulf of California

The large-scale buildout of LNG on Mexico’s Pacific Coast would have occurred in one of the most unique marine environments in the world. The Gulf of California is home to whales, seals, sea lions, turtles and an endless array of fish. It has been designated a UNESCO World Heritage Site and is nicknamed the “Aquarium of the World” because of the abundance of marine life. 

LNG tanker traffic threatened these species with noise, collisions, air and water pollution.

“Of course, we are incredibly happy that this cancellation has happened. But it is one of three. There are two more to go,” Mima Holt, global coordinator at NRDC, a Washington DC-based environmental organisation, told Gas Outlook, referring to the still remaining Saguaro LNG project in Sonora and Amigo LNG, a proposed floating LNG project, in Sinaloa.

Another project, Gato Negro LNG, is located further south and also remains under consideration, although it is located outside the Gulf of California.

Ahead of the news of the cancellation, NRDC had published a brief warning about financial and reputational risk to Sempra Infrastructure from pursuing Vista Pacifico.

“It’s a big relief for not just for the Gulf of California, but for all the communities that depend on the Gulf. There’s an entire economic ecosystem that depends on the Gulf — the tourism operators, small businesses, and a huge amount of Mexico’s fish consumption is from the Gulf of California,” she said. “There is this economic value attached to the Gulf of California that is more than what exporting LNG could give the country of Mexico.”

More than half of Mexico’s fish production comes from the Gulf.

“It is a big relief especially for the whales and the marine biodiversity that have nothing to do with this.”

(Writing by Nick Cunningham; editing by Sophie Davies)