Mexico Pacific’s Saguaro LNG: Wrong Project, Wrong Place

None of this would be possible without significant financial support from investors and advisors—companies like Quantum Capital Group, a Houston- and New York–based, fossil fuel–focused private equity firm, and J.P. Morgan, the global banking and investment firm acting as U.S. financial advisor to the project. With this in mind, NRDC sent detailed notice letters to Mexico Pacific Ltd. in December, to Quantum Capital (then principal equity owner of Mexico Pacific) in January, and to J.P. Morgan in February, emphasizing to each the inconsistency of their respective environment, social, and governance commitments with their participation in the Saguaro project. 

We highlighted the companies’ failure to disclose or address Saguaro’s potential negative impacts on one of the most important regions of biodiversity on earth. The Gulf is home to an exceptional range of marine and terrestrial species (including endangered blue whales, whale sharks, and leatherback sea turtles), many of which will be threatened by the Saguaro project, its associated infrastructure, and related industrialization and shipping. For good reason, the legendary oceanographer Captain Jacques Cousteau named the Gulf the “Aquarium of the World.” 

With a warning to the companies about their reputational and financial risk, NRDC cited in detail not only UNESCO’s description of the characteristics justifying the region’s World Heritage site designation but a November 2024 letter from the leadership of the International Union for Conservation of Nature (IUCN) to Mexico’s environment minister and to the governor of the state of Sonora. In that letter, the presidents of both the IUCN’s Species Survival Commission and its World Commission on Protected Areas expressed their concern about the range of impacts that the Saguaro project would introduce into this exceptional ecosystem, including, for large whales and other cetaceans, ship strikes and increased acoustic impacts from undersea noise pollution. 

More broadly, the IUCN leaders noted the stressors on the fishing industry and tourism, both at the heart of the economic well-being of the people and communities of the region. 

Beyond these risks to biodiversity and the economy of the region, NRDC discussed other fundamental concerns, from climate change and energy security to incompatibility with Mexico’s long demonstrated commitment to conservation of the region and to marine mammal protection globally. Taken together, NRDC concluded: “It is no exaggeration to say that Mexico Pacific’s vision for the future of the Gulf of California is a profound and consequential crossroad for the planet. Its plan is an existential threat not just to the World Heritage site in the Gulf but to biodiversity at its finest as it remains anywhere on the planet today.” 

While it’s one thing to talk about the unique risks of fossil fuel development to whales and other marine life in the “Aquarium of the World,” it’s quite another to see firsthand what’s at stake. Recently, we had an opportunity to visit the Gulf, immerse ourselves in its natural wonders and stunning beauty, and scope out the proposed location of the massive Saguaro project that threatens these creatures. 

After a week in the region, we returned more convinced than ever that this project, in this location, makes no rational sense. Saguaro is the wrong project in the wrong place, a biodiversity, climate, and economic disaster in the making. 

Joined by two leading marine experts—Dr. Steven Swartz and Dr. Mark Gold—and by NRDC’s International Climate Strategies Director Jake Schmidt, we traveled to the upper Gulf, from Loreto to Bahía de Los Angeles, and across to Isla Tiburón, located near the Gulf’s eastern shore, just to the south of the proposed Saguaro project site. Tiburón is the largest of the three Midriff Islands that create a choke point in the narrow sea; it’s a dangerous obstacle to the planned navigation of the Gulf by an endless parade of 900-foot-long LNG vessels (three football fields in length) that would traverse its waters for decades to and from the Saguaro project site, dumping contaminated ballast water on the way in and loaded with fossil fuel on the way out.  

According to UNESCO, the Gulf is home to 39 percent of all marine mammal species on earth, including eight species of great whales, among them, the two largest animals ever known to inhabit the planet: blue and fin whales. Although May is considered late in the season for marine mammals, we were not disappointed. Over the course of just a week, we observed an astonishing display of marine diversity that included sperm whales, fin whales, pilot whales, humpback whales, sea lions, manta rays, green sea turtles, common and bottlenosed dolphins, scores of swarming pelicans, and countless schools of fish. 

As we headed north from Loreto into colder waters, each day brought new encounters. Although among the deepest divers of the great whales—known to descend for 90 minutes at a time in search of giant squid—small groups of sperm whales surfaced in the vicinity of our boat in waters east of Mulegé, totaling an estimated 40 individuals. On Isla San Esteban, we found a California sea lion rookery, with more than 100 individuals present or in surrounding waters. West of Isla Tiburón, we were surrounded by 8 to 10 widely spaced fin whales surfacing, blowing several times, and then diving. Throughout the week, we spotted humpback whales, including, south of Isla San Lorenzo, an individual lunge feeding on a school of fish as a lone sea lion circled nearby, hoping for leftovers. Several times, our boat was overtaken by large, dispersed groups of short-finned pilot whales and, even more frequently, by hundreds of common or bottlenosed dolphins too numerous to count. 

“The marine mammal species diversity and abundance that we observed in just a few days around the proposed shipping lanes for the Saguaro project, including near the Midriff Islands choke point, were stunning—just jaw-dropping,” observed Dr. Swartz, a longtime whale expert for the Marine Mammal Commission and U.S. National Marine Fisheries Service. About the dangers of the Saguaro project, Dr. Gold, former California deputy secretary for Oceans and Coastal Policy, warned that “the risk of ship strikes and increased ocean noise in a sensitive marine environment like this, heavily populated by great whales and other marine mammals, is obvious, unmitigable, and unacceptable.”

What quickly became obvious during our visit is that the iconic biodiversity that Captain Cousteau so memorably described is indeed the extraordinary reality of the Gulf. It’s the factual basis on which UNESCO’s World Heritage Committee designated the Islands and Protected Areas of the Gulf of California a World Heritage site in 2005 and as a Migratory Bird Refuge in 1978; in 1993, Mexico designated much of the region as a Biosphere Reserve. Each of these recognitions reflects a formal governmental acknowledgement of both the Gulf’s unique natural resources and the need for their protection from development that puts them at risk. And each is compelling, conclusive evidence that the Gulf is the wrong place for industrialization by the fossil fuel industry. 

In support of our Mexican partners, this is the heart of the position that NRDC has emphasized against Saguaro. And it’s no surprise that, as public understanding of the project and its risks have grown, so, too, has the opposition—with predictable consequences. 

Mexico Pacific initially predicted a final investment decision on the project by early 2021, but none has been achieved, and none is in sight. In fact, the company seems increasingly mired today in a morass of operational and legal troubles that threaten to drown out the company’s assurances of progress with a crescendoing chorus of international condemnation. Since LNG is already known for economic volatility, it is difficult not to conclude that Mexico Pacific is losing ground. 

Consider, for example, these recent developments:

1. A preliminary injunction blocking Saguaro’s construction remains in effect in five consolidated lawsuits currently pending in Mexico.
2. Lawsuits have also been filed in Mexico and the United States challenging permitting for Saguaro’s gas supply pipelines: the Saguaro Connector Pipeline north of the border and the Sierra Madre Pipeline in Mexico.
3. In early February, the project’s former principal equity owner Quantum Capital announced its intention to sell. One month later, Mexico Pacific filed with the U.S. Department of Energy a notice for “change in control” to an unidentified equity holder called Mexico Pacific Holdings LP. Public Citizen, Sierra Club, and NRDC have filed a formal protest.
4. In late February, Mexico Pacific announced it was laying off staff in Houston and Singapore and moving its headquarters to Mexico City.
5. In March, it was reported that Mexico Pacific is simultaneously negotiating with Bechtel Corporation over rising costs and seeking to renegotiate its supply purchase agreements with offtakers to cover those costs.
6. In April, after just one year on the job, CEO Sarah Bairstow announced she had accepted a job at another company and would be leaving Mexico Pacific. In May, the company announced it had hired a replacement—its sixth CEO in seven years.
7. Although Saguaro had been on the pending project list for funding consideration by the Export-Import Bank of the United States, a notice of withdrawal was filed and posted on May 21. No explanation has been publicly disclosed.
8. Expected demand for natural gas (including LNG) has not materialized, and in May, it was reported that industry analyst predictions of a booming LNG export market in Mexico have been “moderated.” LNG demand growth in Asia—the target market for Mexico Pacific—is proving “deeply uncertain,” and the International Energy Agency expects Asian LNG demand to decline in 2025, noting that China’s LNG imports fell 25 percent in the first quarter of 2025. Earlier this year, as trade tensions increased, China ceased all imports of LNG from the United States.

None of this inspires confidence in Mexico Pacific as a sound economic or environmental investment. All of it cautions, “Investors, beware.” But whatever uncertainties there may be about LNG generally or about the future of the Saguaro project specifically, one thing is certain: 

With the Gulf of California so clearly in the bull’s-eye of the fossil fuel industry, it is not a time for complacency about the ultimate outcome of the industry’s scheme to industrialize this natural sanctuary. The opposition’s momentum is on the rise, and neither NRDC nor its coalition partners in Mexico will rest until the protection that this World Heritage site requires is secured for future generations. The Gulf of California must not be allowed to become the latest chapter in the accelerating tragedy of global climate change. 

The decision on Saguaro—the choice between nature and fossil fuels in the Gulf—is an existential crossroads for the planet. As Mexico and its people have done consistently for generations in the region, we choose nature. 

This expert blog was originally published January 15, 2025, and has been updated with new information and links.