Mexico Pacific inks 20-year LNG supply deal with China’s Guangzhou Development

China’s Guangzhou Development Group said it has signed a long-term deal to buy liquefied natural gas from Mexico Pacific, the developer of the planned 14.1 mtpa Sonora LNG export project.

Under the contract, Guangzhou Development Natural Gas Trading, a unit of GDG, would purchase two million tonnes per year of LNG from MPL’s subsidiary Mexico Pacific LNG Markets for a period of 20 years, according to a statement by GDG released on Friday.

GDG said LNG deliveries would start once commercial operations begin at MPL’s LNG export development in Puerto Libertad, Sonora.

The Chinese natural gas and power firm said the supplies would be linked to the Henry Hub index.

Moreover, GDG said it would receive 1 million tonnes per year from each of the first and second phases of the Sonora LNG export project.

GDG said that the contract would take effect once MPL arranges financing for the project and starts construction on the LNG facility.

FID in 2022?

MPL plans to build the LNG export facility in three phases sourcing natural gas from the Permian gas basin in the United States.

The first phase includes one 4.7 mtpa liquefaction train, a tank, and a jetty, while the second phase consists of a second 4.7 mtpa liquefaction train and another tank.

The third phase completes the anchor project with a third 4.7 mtpa liquefaction train, MPL previously said.

GDD said in the statement that MPL plans to take FID for the first two phases in the second half of this year.

MPL, controlled by US investment firm AVAIO Capital, said in October last year it had signed a collaboration agreement with ConocoPhillips LNG Licensing, and Bechtel, working with Techint.

The firm previously said it had expected to reach FID by the first quarter of 2022 and to begin exports by 2025 but this will probably move to 2026.

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