U.S. energy regulators approved Mexico Pacific LNG’s Saguaro pipeline that would transport 2.8 billion cubic feet of natural gas per day from Texas to Mexico for export as liquefied natural gas (LNG).

According to a Reuters news report, the Federal Energy Regulatory Commission's (FERC) decision clears a key hurdle for Mexico Pacific LNG's plan to build a $15 billion LNG export plant with a capacity of 15 million metric tons per annum on Mexico's west coast. However, the company has yet to make a final investment decision.

The approval comes despite opposition from environmental groups concerned about the project's climate impact, with the Sierra Club and other Texas organizations arguing that FERC should have considered the greenhouse gas emissions associated with the pipeline and the LNG plant, including potential methane leaks.

Following the Biden administration's recent pause on new LNG export permit reviews, the decision comes at a time when the administration wants the Department of Energy to consider the broader climate, consumer, and community impacts of such projects before making decisions.

FERC, however, concluded that the Saguaro Connector Pipeline met the necessary environmental standards and would not significantly impact U.S. natural gas prices. The commission also noted that the project would create jobs and boost economic activity in the U.S. and Mexico.

If the company proceeds, the pipeline and LNG plant construction could begin within the next year.