Shell Eastern Trading Pte. Ltd. has signed up for a future purchase of 1.1 million metric tons per year of liquefied natural gas (LNG) from the third train of the planned Saguaro Energia LNG facility, project owner Mexico Pacific Ltd said on Monday . (MPL).
“Under the purchase and sale agreement, Shell will buy LNG for free on board for a period of 20 years,” said MPL, operator of the Anchor Export Project in Mexico’s Sonora state.
This company builds on Shell’s initial “MTPA 2.6 [million tons per annum] the commitment of Train 1 and Train 2, to also support more than 20 percent of the capacity of Train 3,” MPL CEO Ivan Van der Walt said in a press release.
Saguaro Energia in the first phase of its development will have three trains that can transport up to 14.1 million metric tons per year in total, according to Texas-based MPL. The project has its eyes especially on the Asian market.
“Our project will provide Asia with low-cost Permian gas, bypassing the Panama Canal to ensure a shorter transportation distance to Asia, to achieve lower transportation emissions and landing prices compared to the US Gulf Coast,” Van der Walt said.
“As we work to deliver a final investment decision (FID) on the first two trains, we are also closing procurement through the significant existing commercial momentum for Train 3 to ensure that a subsequent Train 3 FID can follow the as quickly as possible,” he added.
ExxonMobil has also committed to purchase two million metric tons per year from Saguaro Energia. MPL announced on February 7, two agreements affiliated with ExxonMobil LNG Asia Pacific has signed for the purchase of free LNG on board the first two trains of the export facility for 20 years.
Steve Hill, executive vice president of energy marketing at Shell, said: “LNG is an increasingly important pillar of global energy security.”
“Investment in liquefaction projects is needed to avoid a gap between supply and demand that is expected to emerge in the late 2020s. We are pleased to work with Mexico Pacific to provide more LNG to the global market,” Hill added.
Three months ago, MPL asked the US Department of Energy for authorization to add more natural gas to its exports. It wanted to send 291.22 Bcf per year by pipeline to Mexico and liquefy it there for re-export to countries regardless of free trade status with the US. fuel for transportation or liquefaction by pipeline in the Latin American nation.
The company said in the Dec. 22 filing that “the total 425.57 Bcf/yr MPL is seeking authorization to export, when added to the 621 Bcf/yr MPL currently authorized to export, equals a total of 1,046.57 Bcf/year”.
“MPL is submitting this application in connection with the ongoing development of an LNG production and offtake facility located in the state of Sonora, Mexico (the ‘MPL Facility’),” it added. MPL said it was calling for higher exports after getting more capacity from the MPL facility.
“The MPL facility remains particularly well positioned to supply LNG to Asian markets, including markets in Korea, Japan and China, each of which can be supplied by ship from the MPL facility without having to transit the Panama Canal , as well as the markets of South America (in particular Chile, Colombia and Ecuador)”, said the request.
MPL stated in the filing that it expects an FID for the MPL facility “in the coming months” and that the facility could begin exporting LNG in 2027.
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