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Under the 20-year SPA, Posco International will offtake 0.7 million tonnes per year of LNG on a FOB basis from Mexico Pacific’s LNG export facility, Saguaro Energia, located in Puerto Libertad, Sonora, according to a statement by Mexico Pacific.
The two firms are evaluating additional opportunities to expand upon this initial commercial partnership, Mexico Pacific said.
South Korea has a “robust” trade relationship with Mexico and is one of the only major economies in Asia that has a comprehensive free trade agreement (FTA) with the United States, Mexico Pacific noted.
“We are delighted to welcome Posco International as a foundation customer, further validating the strategic value of west coast North American LNG for Korea, one of the world’s largest LNG importing markets,” said Sungbok Park, chief marketing officer of Mexico Pacific.
US gas
Through further engineering in collaboration with its EPC contactors, Mexico Pacific has achieved “significant optimization outcomes” this year, the company said.
When operational, the first phase of Mexico Pacific’s Saguaro Energía LNG facility will comprise three liquefaction trains and associated infrastructure.
The LNG facility will leverage natural gas from the Permian Basin in Texas, providing the “lowest landed price of LNG” into Asia globally, it said.
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.
FID
“With three liquefaction trains commercially contracted, strong support from governments and capital markets, and key federal, state, and municipal permits in place across the Saguaro Energía LNG facility and the Sierra Madre Pipeline, Mexico Pacific is positioning the project for a positive final investment decision (FID),” the firm said.
Mexico Pacific did not say when it expects to take FID.
The firm said in December 2023, while announcing a long-term deal with Australian LNG player Woodside, that it expects to take FID on the first two trains in the first half of this year.
Also, Mexico Pacific said in April it expects to begin construction in the second half of this year.
In January, the LNG terminal developer signed another 20-year sales and purchase agreement with a unit of US energy giant ExxonMobil for 1.2 million tonnes per year of LNG on a free-on-board basis.
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.