Demand for Mexico Pacific LNG Ownership Detail
By Tyson Slocum
Mexico Pacific Limited LLC (MPL) is developing a proposed liquefied natural gas (LNG) export facility in Sonora, Mexico utilizing natural gas sourced from the United States. Today Natural Resources Defense Council and Sierra Club joined with Public Citizen to challenge a protest to Mexico Pacific’s March 6 change in control because it is deficient and therefore inconsistent with the public interest. The notice lists a Second Transaction where a shell company, Mexico Pacific Holdings L.P., obtained voting control of MPL pursuant to the terms of a Second Restated MXP Agreement, with control of MPL’s “business and affairs” vested in a Board of Managers comprised initially of three persons. The notice fails to identify the persons or entities that control Mexico Pacific Holdings, L.P.
The Department of Energy’s change in control regulations require applications seeking to export natural gas from the United States to identify “all the participants in the transaction, including the parent company, if any, and identification of any corporate or other affiliations among the participants” with “a rebuttable presumption that control exists … from the ownership or the power to vote, directly or indirectly, 10 percent or more of the voting securities of such entity.” Mexico Pacific’s decision to only list a shell company— Mexico Pacific Holdings L.P.— fails the Department of Energy’s change in control disclosure requirements.
At a minimum, the Department of Energy must compel public disclosure of:
- The limited liability agreement of Mexico Pacific Holdings L.P., which will detail what entities or individuals have rights and can control it.
- The entire Second Restated MXP Agreement, as it will describe what entities or persons can control it.
- The identities of the people serving on its Board of Managers, since they direct the management of MPL.
Absent these disclosures, the Department of Energy and the public have no idea who controls Mexico Pacific Holdings L.P. or MPL. It is inconsistent with the public interest to approve a change in control that divulges nothing but a shell company as the ultimate upstream owner.
Slightly more information is available about the owner in the First Transaction from February 3 through March 3, Kronos Polo L.P., because of Texas incorporation records, but even these secondary disclosures are inadequate and inconsistent with the public interest. Exhibit A is the December 17, 2024 Certificate of Formation of Kronos Polo LP, listing Michael LaGatta of Fort Worth, Texas as its registered agent and Kronos Polo Advisors LLC as its general partner. Exhibit B is the December 17, 2024 Certificate of Formation of Kronos Polo Advisors LLC, which lists Michael LaGatta and Alberto Lacarra as managers. Exhibit C is the December 31, 2024 public information report of Kronos Polo Advisors LLC which lists Kronos Holding Advisors LLC as its parent company. Exhibit D is the November 5, 2024 Certificate of Formation of Kronos Holding Advisors LLC which lists Michael LaGatta as the registered agent and Alberto Lacarra as its manager.
The change in control notice states that “[t]he prior controlling equity holder, Quantum LNG Holdings, LLC, will retain a material non-equity economic interest in the project together with prior minority equity owners,” with a media report adding that “Mexico Pacific, through a spokesperson, said Quantum [Capital] remains a partner in the project with an economic interest.” This appears to suggest that one potential purpose of the shuffle involving Kronos and Mexico Pacific Holdings, L.P. is to obscure current and future investors as limited partners instead of equity owners in an effort to conceal the identities of future owners and investors.
Absent additional disclosure of Mexico Pacific Holdings L.P.—including its limited liability agreement, the entire Second Restated MXP Agreement and the identities of all people serving on its Board of Managers—the change in control should be deemed deficient because the Department of Energy and the public have absolutely no idea who actually controls MPL, and therefore the current change in control notice is inconsistent with the public interest.
Read the full filing, with exhibits, here: MexicoPacificKronos1