Mexico Pacific awards Saguaro LNG pipeline contract

Mexico Pacific, the developer of the planned $14 billion Saguaro Energia LNG export project, has awarded the engineering, procurement, and construction contract for the pipeline which will deliver natural gas to the proposed facility.

According to a statement by Mexico Pacific, GDI Sicim Pipelines and Bonatti will build the Sierra Madre pipeline project.

Under the lump-sum-turnkey EPC contracts, the joint venture will engineer, procure, and construct the Sierra Madre pipeline with Bonatti’s scope extending to the required compressor stations, Mexico Pacific said.

It did not reveal the price tag of the contract.

The 500-mile (850km) pipeline will be utilized as the primary natural gas supply path for the transportation of up to 2.8 Bcf/d natural gas from the US border to the first phase of Mexico Pacific’s 15 mtpa Saguaro Energia LNG export facility located in Puerto Libertad, Sonora, Mexico.

“Execution of our pipeline EPC contracts represents yet another important inflection point for our project as we prepare to move into construction,”  Ivan Van der Walt, CEO of Mexico Pacific, said in the statement.

He did not provide any information regarding the final investment decision on the project.

The CEO said in August the company’s focus is on delivering the FID on the first two trains with train 3 to follow “shortly thereafter”.

LNG contracts

In August, Mexico Pacific signed a long-term deal to supply liquefied natural gas to US energy giant ConocoPhillips.

Under the 20-year SPA, ConocoPhillips will offtake 2.2 million tonnes per year of LNG on a FOB basis from Mexico Pacific’s anchor LNG export facility and the deal includes train 1, 2, and 3.

Prior to this deal, China’s Zhejiang Energy agreed to buy 1 mtpa of LNG for 20 years from the proposed project.

In March, Shell and Mexico Pacific signed another SPA for 1.1 million tonnes per year from the third train of Mexico Pacific’s anchor LNG export facility.

This is the third SPA for the two firms as they announced a 20-year deal in July last year for 2.6 million tonnes per year of LNG from the first two trains.

Besides Shell, Mexico Pacific signed two long-term LNG SPAs with a unit of US energy giant ExxonMobil.

Under these SPAs, ExxonMobil LNG Asia Pacific will purchase a combined 2 million tonnes per year of LNG on a free-on-board basis from the first two trains of Mexico Pacific’s anchor LNG export facility.

Moreover, the firm controlled by Quantum Energy Partners also signed a contract last year with China’s Guangzhou Development Group for 2 mtpa of LNG.

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