Mexican LNG project signs gas trade agreement

Woodside Energy has signed an agreement to purchase 1.3 million tonnes per year of LNG from Mexico’s Saguaro Energia LNG facility, the Australian E&P player announced on Wednesday.

Under the 20-year sales and purchase agreement, Woodside Energy will offtake LNG from the project located in Puerto Libertad, Mexico, on a free-on-board basis with pricing linked to US gas indices.

The deal is subject to Mexico Pacific – the operator of the development – taking its FID on the third train at the facility, which is expected in H1 2024.

“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.

“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,” said Meg O’Neill, CEO of Woodside Energy.

The Saguaro Energia LNG development will have a production capacity of 15 million tonnes per year in its first phase and is being worked on by engineering and technology companies Bechtel, Techint and Baker Hughes.

Previously Mexico Pacific made LNG trade deals with energy giants Shell, ExxonMobil and ConocoPhillips involving the first two trains at the project.

Feedstock gas is expected to come from the USA’s Permian basin.

In November 2023, Mexico Pacific signed an EPC contract with Mexican-Italian joint venture company GDI Sicim Pipelines to build a 804-kilometre pipeline from the US border to the project.