Mexico Pacific Limited (Mexico Pacific) and Woodside have signed a sales and purchase agreement (SPA) for 1.3 million tonnes per annum (Mtpa), equivalent to approximately 18 cargoes per year, of liquefied natural gas (LNG) for 20 years.
Mexico Pacific Limited (Mexico Pacific) and Woodside have signed a sales and purchase agreement (SPA) for 1.3 million tonnes per annum (Mtpa), equivalent to approximately 18 cargoes per year, of liquefied natural gas (LNG) for 20 years.
Under the SPA, Woodside will purchase the LNG on a free-on-board basis over a term of 20 years from the proposed third train of Mexico Pacific’s Saguaro Energia LNG Project with pricing linked to US gas indices. The SPA is subject to Mexico Pacific taking a final investment decision (FID) on the proposed third train at the Saguaro Energia LNG Project which is expected in the first half of 2024.
The Saguaro Energia LNG Project leverages low cost Permian Basin natural gas in the U.S. and a Pacific Basin facing liquefaction site to deliver more cost efficient LNG for supply into the world’s largest LNG market, Asia without risk of the Panama Canal.
Woodside CEO Meg O’Neill said: “As we deliver on our strategy, we aim to complement Woodside’s produced LNG supply with third parties’ volumes, giving us greater scale and portfolio flexibility to serve our customers, while optimising our LNG trading activities.
“This agreement with Mexico Pacific delivers a new source of LNG into our trading portfolio, expands our geographic diversification in the Pacific Basin and builds on our presence in Mexico.
“The Saguaro Energia LNG Project is located on Mexico’s Pacific coast, providing proximity to key markets in Asia,” she said.
“We are delighted to welcome Woodside, one of the most established global LNG market participants, as a foundation customer of Train 3, further validating the value of west coast Mexican LNG.” said Sarah Bairstow, President of Mexico Pacific. “We look forward to continuing our collaborative relationship with Woodside to bring additional supply online to address critical energy security and energy transition needs.”
