US LNG player New Fortress Energy has signed two separate deals under which it plans to install floating LNG production units off Mexico.
Wes Edens-led NFE previously revealed plans to install up to eight floating liquefaction facilities in the US Gulf of Mexico using its “Fast LNG” liquefaction design that incorporates modular, midsize liquefaction technology with jack up rigs or similar offshore infrastructure.
Now the company has signed deals with Mexico’s Pemex and Comision Federal de Electricidad (CFE) to deploy “multiple” FLNG units each with a capacity of 1.4 mtpa.
Lakach field FLNG
NFE said in a statement on Tuesday it signed a long-term strategic partnership with Pemex.
The agreement involves the joint development of the Lakach deepwater natural gas field for Pemex to supply natural gas to Mexico’s onshore domestic market and for NFE to produce LNG for export to global markets.
Located about 70 kilometers off the coast of Veracruz in southeastern Mexico, Lakach is one of the largest non-associated gas fields in the Gulf of Mexico with total original gas in place of 1.1 trillion cubic feet.
Coupled with nearby undeveloped fields Kunah and Piklis, the area has a total resource potential of 3.3 Tcf and comprises one of the most significant undeveloped offshore gas resources in the Western hemisphere, according to NFE.
Under the deal with Pemex, NFE said it would invest in the continued development of the Lakach field over a two-year period by completing seven offshore wells.
In addition, NFE will deploy to the Lakach field a 1.4 mtpa FLNG unit to liquefy the majority of the produced natural gas.
Pemex would utilize the remaining natural gas and associated condensate volumes in Mexico’s onshore domestic market.
At least ten years of production
NFE and Pemex believe the Lakach field will yield about ten years of production, with the possibility of “significantly” extending the reserve life if the duo decides to develop nearby fields.
The transactions remain subject to customary terms and conditions and finalization of related agreements.
“We are honored to enter into this important strategic partnership that strengthens NFE’s commitment to long-term operations in Mexico and demonstrates the tremendous value of our integrated natural gas infrastructure business model,” Edens said in the statement.
“This is the first of a number of offshore development opportunities that leverage what we think is an ideal formula for offshore gas assets around the world – one that combines gas for domestic use with gas for export,” he said.
NFE said in a separate statement on Tuesday it entered into an agreement with CFE to work on several developments.
The agreement involves expanding and extending NFE’s supply of natural gas to multiple CFE power generation facilities in Baja California Sur, as well as the sale of NFE’s 135 MW La Paz power plant to CFE.
In addition, the partners will create a new LNG hub off the coast of Altamira, Tamaulipas, with CFE supplying the requisite feedgas to two NFE FLNG units using CFE’s existing pipeline capacity.
NFE launched in July last year an LNG terminal in the port of Pichilingue in Mexico’s Baja California Sur state.
The terminal, which features NFE’s proprietary ISOFlex system, is optimally positioned to supply natural gas to CFE’s generation facilities in the otherwise resource-stranded region, which include CTG La Paz and CTG Baja California Sur.
Pursuant to the new deal, CFE and NFE will extend the term of NFE’s gas supply agreement to CFE’s power generation facilities in the region and increase the volume of delivered natural gas under mutually agreeable terms.
Additionally, NFE has agreed to sell its own 135 MW power plant in La Paz to CFE.
The addition of this power plant to CFE’s generation fleet would enhance system reliability, reduce power costs, and complement CFE’s plans to expand the use of renewable energy resources and lower emissions in the region, the statement said.
Offshore LNG hub near Altamira
Under the deal, NFE and CFE also plan to collaborate on the creation of a new LNG hub off the coast of Altamira, Tamaulipas.
NFE said it would deploy “multiple” FLNG units of 1.4 MTPA each that utilize CFE’s existing firm pipeline transportation capacity to deliver feedgas volumes to NFE.
As part of the agreement, CFE would share in the production and marketing of a portion of the LNG volumes from the new Altamira offshore LNG hub, it said.
NFE did not provide any additional information.
These transactions also remain subject to customary terms and conditions and finalization of related agreements.