Mexico Pacific and the government of the state of Sonora have signed a collaboration agreement that supports the liquefied natural gas (LNG) export facility of the company Saguaro Energia, located in Puerto Libertad, Sonora, Mexico, Mexico Pacific said in a press release.
As part of the agreement, the government of Sonora has pledged to “pave an efficient path” to build the project, including the timely and ongoing issuance of state and municipal permits, according to the news release. With government support, Mexico Pacific said it expects construction to begin this year.
“We are pleased to enhance our strategic relationship with the government of Sonora as we prepare to begin construction of our Saguaro Energia LNG facility, with the support of Mexico’s skilled workforce and our local communities,” said Ivan Van der Walt, CEO of Mexico Pacific. “We appreciate the president’s continued support [Andres Manuel] Lopez Obrador and Governor [Alfonso] Durazo as we work together to position our project, and the state of Sonora, to lead the way in cleaner, more affordable energy production.”
Mexico Pacific’s LNG project represents the largest foreign private investment in Mexico’s history, according to the company.
Earlier this month, Mexico Pacific signed a purchase and sale agreement with Zhejiang Energy International Limited of China for the collection of 1.0 million tonnes per annum (Mmtpa) of LNG from Saguaro Energia.
Under the agreement, Zhejiang Energy will purchase LNG for free on board for a period of 20 years, according to the press release.
“We are delighted to deepen our supply relationship with Asian end-user customers through this long-term SPA with Zhejiang Energy,” said van der Walt. “LNG is an important pillar for China’s energy security needs and its underlying green policy ambitions. Zhejiang Energy is the sole gas supplier to Zhejiang Province, one of China’s largest provincial economies, and under this new agreement, Mexico Pacific will further support the region’s growing energy requirements.”
“Zhejiang Provincial Energy Group (ZEG) has a constant interest in exploring energy resources internationally, such as natural gas,” said Xiqiang Chai, deputy general manager of Zhejiang Provincial Energy Group. “This new long-term agreement with Mexico Pacific is an important step to further diversify our energy supply portfolio and strengthen ZEG’s natural gas industry. We are delighted to partner with Mexico Pacific as they work to deliver low-cost LNG to China.”
In March, Shell Eastern Trading Pte. Ltd. signed the purchase of 1.1 million metric tons of LNG per year from Saguaro Energia’s third train, also free on board for a term of 20 years.
The company is building on Shell’s “initial commitment of 2.6 mtpa from Train 1 and Train 2, to also support more than 20 percent of Train 3 capacity,” van der Walt said.
ExxonMobil has also placed a 2.0 Mmtpa order with Saguaro Energia. Two agreements, affiliated with ExxonMobil LNG Asia Pacific, provide for the purchase of free LNG on board the first two trains of the export facility for 20 years.
According to Mexico Pacific’s website, Saguaro Energia’s LNG facility will achieve significant logistical and cost advantages that will result in the “lowest landed price for US LNG in Asia” by leveraging low-cost natural gas from the nearby Permian Basin and a significantly shorter shipping route, avoiding the risk of Panama Canal transit for Asian markets.
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