(Reuters) Mexico Pacific said it had reached a deal to supply ExxonMobil with an additional 1.2 million tonnes per annum of liquefied natural gas, clearing the way for a final investment decision to expand its Saguaro Energia LNG plant.
ExxonMobil LNG Asia Pacific tied up the agreement to buy the LNG from a proposed third train, or production unit, at the Saguaro Energia project on Mexico's west coast, Mexico Pacific said in a statement.
ExxonMobil to buy another 1.2 million tonnes of LNG per annum from Mexico Pacific
Under the new deal, Exxon will buy the LNG on a free-on-board basis over a 20-year term.
“We are pleased to announce this additional long-term SPA with ExxonMobil, extending our much-valued partnership into Train 3”, said Ivan Van der Walt, CEO Mexico Pacific. “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. 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 to provide reliable and cost-effective LNG to support the energy transition.”
“Bringing additional North American LNG to global markets advances energy security and helps to lower emissions in many countries with high energy demand,” said Peter Clarke, ExxonMobil’s Head of Global LNG and Senior Vice President. “Long term contracts play an essential role in underpinning the investments that will be required to advance the energy transition. We look forward to working with Mexico Pacific to continue growing our portfolio and deliver Permian natural gas to global markets.”
The Saguaro Energia project is set to ship 15 million tonnes per annum of LNG to Asia, using gas from the U.S. Permian Basin. The project has a price tag of over $15 billion, officials from the Mexican state of Sonora said last year.
