Mexico Pacific’s Saguaro LNG Project: Hitting the Rocks?

In December 2018, the U.S. liquefied natural gas (LNG) developer Mexico Pacific applied for and received from the U.S. Department of Energy (DOE) a seven-year permit to export U.S. natural gas from a proposed $15 billion LNG terminal in Mexico—called Saguaro—to be built on the northeastern shore of the Gulf of California. Home to a UNESCO World Heritage site, a biosphere reserve, and one-third of all marine mammal species, the gulf has famously been described as the “aquarium of the world” because the number and diversity of its marine life is unsurpassed on earth.    

Today, with Saguaro facing intense and growing opposition (including from NRDC), that seven-year permit is about to expire—and it should be allowed to do so. Predictably, but without legitimate justification and with little to show for the $300 million it claims to have spent thus far, Mexico Pacific now seeks a permit extension, ignoring a history of consistent failure for which it is largely to blame. In fact, its extension application is driven not by project merit but by the company’s failure to comply with a foundational condition in its 2018 permit—namely that actual export of LNG must begin by December 14, 2025. That critical permit term, to which Mexico Pacific readily agreed in 2018, has not been, and unquestionably will not be, met.

No LNG export has begun or is anticipated for years, if ever. Construction stopped at site clearance and grading due to a preliminary injunction issued by the Mexican courts, where five cases are currently pending against the project. No final investment decision, promised repeatedly by the company since 2021, has been made, and the financing required to achieve it has not been secured.

A backdrop of failure

Staff layoffs and a relocation of Mexico Pacific’s headquarters to Mexico City were announced in February 2025, its principal equity owner Quantum Capital Group sold its controlling interest in March, and its then-CEO, Sarah Bairstow, took another job in April. In May, without explanation, Saguaro was withdrawn from the U.S. Export Import Bank’s pending project list for funding consideration. According to a June 2025 industry economic analysis, “investors would be wise to pay close attention to the many warning signs flaring around this troubled project.”

Against this backdrop of failure, Mexico Pacific has now asked the DOE for an “extension” not just for 12 to 18 months but for seven more years, equal in duration to its original permit term. In effect asking the DOE for a do-over, the company now claims that it’s not to blame, that “circumstances completely outside of its control” are responsible for the delay, and that “good cause” dictates that it be given another chance. Although it has very little to show for the passage of time and the hundreds of millions of dollars allegedly expended, Mexico Pacific is seeking to extend its export permit until 2032. 

Why the DOE should deny the extension request

There is in fact no good cause for Mexico Pacific’s failure to meet this unambiguous permit term, and, as argued in an extensive protest filed last week by a coalition of project opponents (Centro Mexicano de Derecho Ambiental, Earthjustice, Public Citizen, Sierra Club, and NRDC), the DOE should deny the request. Consider, for example, the following:

First, in support of its assertion of “good cause,” Mexico Pacific fails to demonstrate a factual connection between the cited external events and its own permit noncompliance.

• Citing the “immediate and prolonged” negative impact of the COVID-19 pandemic beginning in 2020, Mexico Pacific fails to note that, in an application to the DOE for an increased export authorization in December 2022, it never mentioned any delays in or obstacles to meeting its permit obligations, including related to the pandemic. 

• Citing the Biden administration’s “pause” on LNG export applications in 2024, Mexico Pacific offers no specific facts demonstrating that the industrywide directive interfered with the company’s progress or permit compliance. Notably, during that same period, other LNG projects in Mexico advanced in compliance with their permit obligations—in particular, Sempra Energy’s Costa Azul LNG project on the western coast of Baja California and New Fortress Altamira FLNG in the Gulf of Mexico.

• Citing the presidential transitions in Mexico and the United States, Mexico Pacific claims that this, too, resulted in “additional uncertainty” regarding “the direction of U.S.–Mexico trade relations generally.” Again, no specific facts are provided reflecting impacts unique to Saguaro.   

Second, Mexico Pacific says little to nothing about its unique history of decision-making to circumvent meaningful environmental review of the Saguaro project. 

Originally permitted in 2006 as a re-gasification project for import, Mexico Pacific decided in 2018 to convert it to a liquefaction terminal for export. Unfortunately, the company chose to do so based on the same review undertaken and permit issued in 2006 for the regasification project—a project with a very different purpose and a lesser range of potential impacts. 

Initially rejected by the Mexican permitting agency as “completely changing the nature of the project for which the authorization for construction and operation was granted,” Mexico Pacific nevertheless elected to continue, and today it is having to answer in multiple lawsuits for its misguided decision to pursue that shortcut.

Third, Mexico Pacific has failed from the outset to acknowledge the unique risks posed by Saguaro’s unacceptable location.

Saguaro is set to be constructed in a region globally recognized as a sanctuary of rare biodiversity—an iconic attribute of the gulf that, in 2005, resulted in UNESCO’s designation of the Islands and Protected Areas of the Gulf of California World Heritage site. Perhaps hoping that no one would notice, or no one would care, the company rolled the dice, refusing to come to terms with the unacceptable level of unavoidable risk to protected species and their habitat and the inevitable intensity of public opposition that would flow from that foundational siting decision. Predictably, as the profile of Saguaro has increased, so too has public opposition, reputational risk, and the level of uncertainty among potential investors about the likelihood of financial return.

The Gulf of California is no place for LNG

While Mexico Pacific’s application for a seven-year permit extension is premised on convincing the DOE that the fault for Saguaro’s failure lies elsewhere, the history of Mexico Pacific’s own actions and poor decisions tell a different story. It is the “delays, turmoil, and permitting errors” caused by those actions and those decisions, rather than the external events now alleged by the company to be “good cause,” that have consistently “stymied” the Saguaro project and now dictate the DOE’s denial of the extension. Mexico Pacific’s unsuccessful seven-year campaign to secure financial support has failed, its request for another seven years to keep trying is unjustifiable, and Saguaro should be definitively abandoned.

Until then, opposition to Saguaro will continue and grow. But, more broadly, it is time to recognize and accept that the Gulf of California is simply no place for the production and transport of LNG and the industrialization inherent in it. Because of the region’s unique ecological sensitivity, Saguaro, Amigo LNG (proposed for Guaymas, Sonora), Vista Pacifico LNG (proposed for Topolobampo, Sinaloa), or any similar LNG project in the Gulf must be rejected as the wrong project in the wrong place.  

Faced with the certainty of broad-based, well-organized opposition in Mexico and elsewhere, including from NRDC, backing LNG at the expense of nature in the gulf is an existential choice destined for defeat.