Shell Eastern Trading (Pte) Ltd and a subsidiary of Mexico Pacific Limited have signed another sales and purchase agreement (SPA) to offtake around 1.1 mill tonnes per year of LNG from the third train of the Saguaro Energia export facility.
Under the SPA, Shell will purchase LNG on a free on-board (FOB) basis for 20 years. When fully operational, the first phase of the facility will have three trains and a combined capacity of 14.1 mill tonnes per anum.
“We are delighted Shell has chosen to grow with us, building upon their initial 2.6 mill tonnes commitment from Train 1 and Train 2, to also underpin more than 20% of Train 3 capacity,” said Ivan Van der Walt, Mexico Pacific CEO.
“Our project will provide Asia with low cost Permian gas, avoiding the Panama Canal to ensure a shorter shipping distance to Asia, to achieve lower transportation emissions and landed pricing versus the US Gulf Coast.
“As we work to deliver a final investment decision (FID) on the first two trains, we are also closing out contracting across the significant commercial momentum in place for Train 3 to ensure that a subsequent Train 3 FID can follow as quickly as possible,” he explained.
Steve Hill, Shell’s Executive Vice President of Energy Marketing, added: “LNG is an increasingly important pillar of global energy security. Investment in liquefaction projects is needed to avoid a supply-demand gap that is expected to emerge in the late 2020s. We are pleased to be working with Mexico Pacific to provide more LNG to the global market.”
Chuck Davidson, Mexico Pacific Chairman and Partner at Quantum Energy Partners, commented: “Mexico Pacific is uniquely facilitating the connection of low cost Permian Basin gas with the lower carbon fuel needs of Asia to deliver de-risked and affordable new LNG supply, resulting in additional energy security for the region.
“We are pleased to have the ongoing support of Shell, one of the largest market participants, to underpin investment in critically needed new supply,” he said.
