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Mexico’s state-owned CFEnergía has signed a long-term contract to supply 160 million cubic feet per day of natural gas to Pacifico Mexinol, a $3.3 billion ultra-low carbon methanol facility near Topolobampo, Sinaloa, that is expected to become the world’s largest single plant of its kind when it begins operations in late 2029 — producing 2.1 million tonnes annually for buyers including Mitsubishi Gas Chemical in Japan.
Final Piece Before Construction
The gas supply agreement, announced on Monday by Houston-based Transition Industries and CFEnergía — a subsidiary of Mexico’s Federal Electricity Commission (CFE) — represents what the developer called the final outstanding commercial milestone before construction begins in the second quarter of 2026. CFEnergía will deliver gas at market prices using existing pipeline infrastructure, removing the last input-supply uncertainty from a project that has been assembling partners since its launch at COP 28 in December 2023.
When operational, the plant will produce approximately 1.8 million metric tonnes per year of blue methanol from natural gas with carbon capture and 350,000 metric tonnes of green methanol synthesised from captured CO₂ and green hydrogen. The combined 2.1 million tonne output would make Mexinol the largest standalone ultra-low carbon chemicals facility globally — in a market where roughly 40% of world methanol production still relies on coal.
Asia-Pacific Offtake Locked In
Half the plant’s output is already spoken for. Transition Industries signed a letter of intent with Japan’s Mitsubishi Gas Chemical for approximately one million metric tonnes per year over an initial ten-year term with extension options, positioning Sinaloa as a direct supplier to Japan’s chemicals and energy transition sectors. A separate marketing agreement with Macquarie Group covers broader Asia-Pacific distribution.
The methanol will serve downstream industries including plastics, paints, automotive components, construction materials and pharmaceuticals — sectors under growing regulatory pressure to decarbonise their supply chains. The project’s Pacific coast location, near the port of Topolobampo which President Claudia Sheinbaum has designated a national development hub, gives it a freight advantage over Gulf Coast competitors shipping to Asian markets.
Technology and Construction Partners
The plant uses NEXTCHEM’s proprietary NX AdWinMethanol® Zero technology, built around autothermal reforming and integrated CO₂ capture. Italy’s Gruppo Maire subsidiary was awarded a licensing and basic engineering contract worth approximately €250 million in February 2025. Samsung and Techint will handle construction, with Siemens providing automation and energy control systems.
The International Finance Corporation, a member of the World Bank Group, is co-developing the project and sharing development costs under a joint agreement signed at COP 28. IFC’s involvement provides both financing leverage and compliance with its Performance Environmental and Social Standards — a framework that increasingly functions as a prerequisite for institutional capital in large-scale emerging market projects.
Economic Footprint
Transition Industries projects more than 6,000 jobs during construction and at least 450 permanent positions once the plant is operational. The facility will treat and reuse municipal wastewater rather than drawing on seawater or freshwater sources — a design choice that addresses water scarcity concerns in northern Sinaloa while reducing environmental permitting risk.
The project will consume over $4 billion worth of US natural gas over its operational life, creating what Transition Industries CEO Rommel Gallo described as bilateral economic development between Mexico and the United States. The gas supply route runs through CFEnergía’s existing cross-border infrastructure, linking US shale production to Mexican industrial demand without requiring new pipeline construction.
Market Context
Global methanol demand has been growing at roughly 4–5% annually, driven by methanol-to-olefins conversion in China and expanding use as a marine fuel under IMO emissions regulations. The ultra-low carbon segment remains small but is attracting outsized investment as European and Asian chemical buyers seek to decarbonise feedstock without switching away from methanol as a platform chemical. Mexinol’s blue-plus-green production model offers a carbon intensity advantage over both coal-based Chinese production and conventional natural gas plants that lack carbon capture, potentially commanding a green premium from buyers with Scope 3 reporting obligations.
Sources: Financialpost
