Mexico Pacific seals third LNG SPA with ExxonMobil

Mexico Pacific, the developer of the planned $14 billion Saguaro Energia LNG export project, has signed an additional long-term deal to supply liquefied natural gas to a unit of US energy giant ExxonMobil.

Under the 20-year sales and purchase agreement (SPA), ExxonMobil LNG Asia Pacific will purchase 1.2 million tonnes per year of LNG on a free-on-board basis from the third train of Mexico Pacific’s LNG export facility, Saguaro Energia LNG, located in Puerto Libertad, Sonora.

This is the third SPA Mexico Pacific signed with ExxonMobil LNG Asia Pacific following two 20-year deals announced in February last year for a combined 2 mtpa of LNG.

The volume originates from the option under the separate LNG SPAs executed last year, covering volumes from trains 1 and 2.

There is also an option for another 1 mtpa from Train 4, according to Mexico Pacific.

FIDs expected this year

Mexico Pacific said in December, while announcing a long-term deal with Australian LNG player Woodside, that it expects to take a final investment decision on the first two trains in the first half of this year.

“While we remain focused on initially taking FID on trains 1 and 2, this latest LNG SPA with ExxonMobil concludes the LNG sales required for a subsequent train 3 FID expected this year,” Ivan Van der Walt, CEO of Mexico Pacific, said on Tuesday.

“With key contracting and permits in place across the terminal and pipeline, we are well positioned to sanction the project, connecting Permian Basin gas with the world’s largest LNG markets in Asia,” he said.

Contracts

In November 2023, Mexico Pacific awarded the engineering, procurement, and construction contract for the pipeline which will deliver natural gas to the proposed facility.

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.

As per other LNG supply contracts, Mexico Pacific signed in August a long-term deal to supply LNG 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 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.

Moreover, the firm controlled by Quantum Energy Partners also signed a contract in 2022 with China’s Guangzhou Development Group for 2 mtpa of LNG.

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