Mexico Pacific seals another LNG supply deal with Shell

A unit of LNG giant Shell has signed another long-term deal to buy liquefied natural gas from Mexico Pacific, the developer of the planned Sonora LNG export project.

Under the contract, Shell Eastern Trading will purchase 1.1 million tonnes per year from the third train of Mexico Pacific’s anchor LNG export facility, Saguaro Energia, located in Puerto Libertad, Sonora, Mexico.

Shell will buy the volumes from a unit of Mexico Pacific on a free on-board basis for a period of 20 years, according to a statement by Mexico Pacific.

3.6 million tonnes per year

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 of Mexico Pacific’s anchor LNG export facility.

When fully operational, the first phase of the facility will have three trains and a combined capacity of 14.1 mtpa.

“We are delighted Shell has chosen to grow with us, building upon their initial 2.6 mtpa commitment from train 1 and train 2, to also underpin more than 20 percent of train 3 capacity,” Ivan Van der Walt, CEO of Mexico Pacific said in the statement.

He said the project would provide Asia with “low-cost Permian gas, avoiding the Panama Canal to ensure a shorter shipping distance to Asia, to achieve lower transportation emissions, and landed pricing vs. the US Gulf Coast.”

“As we work to deliver a final investment decision (FID) on the first two trains, we are also closing out contracting across the significant commercial momentum in place for train 3 to ensure that a subsequent train 3 FID can follow as quickly as possible,” the CEO said.

Steve Hill, executive VP of energy marketing at Shell, said that LNG is “an increasingly important pillar of global energy security”, adding that investment in liquefaction projects is “needed to avoid a supply-demand gap that is expected to emerge in the late 2020s.”

ExxonMobil and Guangzhou Development Group

Earlier this year, Mexico Pacific signed two long-term LNG SPAs with a unit of US energy giant ExxonMobil.

Under the 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.

Besides Shell and ExxonMobil, the firm controlled by Quantum Energy Partners also signed a contract with China’s Guangzhou Development Group.

Most Popular

Venture Global kicks off CP2 LNG site work

US LNG exporter Venture Global said it had initiated full mobilization and started site work at the company’s third LNG export facility, CP2 LNG.

Purus orders LNG carrier in South Korea

London-based Purus Marine has ordered one 180,000-cbm liquefied natural gas (LNG) carrier in South Korea.

Excelerate advances Vietnam LNG talks

US FSRU player Excelerate Energy is moving forward with its plans to supply Vietnam with liquefied natural gas (LNG) supplies from the US.

More News Like This

Shell takes FID on Aphrodite project to supply Trinidad’s Atlantic LNG

A unit of UK-based LNG giant Shell has taken the final investment decision for the development of the Aphrodite gas field to supply Trinidad and Tobago’s Atlantic LNG export plant.

Peru LNG terminal shipped five cargoes in May

Peru LNG’s liquefaction plant at Pampa Melchorita has shipped five liquefied natural gas cargoes in May, two more than in the previous month.

Shell shareholders re-elect CEO Wael Sawan

Wael Sawan will continue to lead London-based LNG giant Shell following shareholder voting at the company's annual general meeting on Tuesday.

Singapore’s FueLNG wraps up 400th STS bunkering operation

Singapore’s FueLNG, a joint venture consisting of Shell and Seatrium, has completed its 400th ship-to-ship (STS) LNG bunkering operation. FuelLNG delivered LNG to BYD Shenzen, which is said to be the world’s largest LNG-fueled car carrier.