Mexico Pacific, owner of the Saguaro Energía LNG facility and associated Sierra Madre Pipeline, has signed a sales and purchase agreement (SPA) with POSCO International Corp (POSCO), South Korea’s largest energy trading company.
Under the terms of the SPA, POSCO will purchase 0.7 mill tonnes per annum of LNG on a free-on-board (FOB) basis for 20 years.
Both companies are evaluating additional opportunities to expand upon this commercial partnership, they said.
South Korea has a robust trade relationship with Mexico and is one of the only major economies in Asia that has a comprehensive free trade agreement (FTA) with the US.
Through further engineering in collaboration with its EPC contractors, Mexico Pacific has achieved significant optimisation outcomes this year, unlocking incremental LNG volumes that are financeable across global debt markets, the company said.
When operational, the first phase of the Saguaro Energía LNG facility in Puerto Libertad, Sonora, Mexico, will comprise three liquefaction trains and associated infrastructure.
The LNG facility will utilise abundant, low-cost natural gas from the Permian Basin in Texas, providing the lowest landed price of LNG into Asia globally, satisfying the world’s growing energy needs and positioning Mexico as the world’s fourth largest exporter of LNG, it was claimed.
“We are delighted to welcome POSCO International as a foundation customer, further validating the strategic value of west coast North American LNG for Korea, one of the world’s largest LNG importing markets,” said Sungbok Park, Mexico Pacific’s Chief Marketing Officer. “We look forward to a lasting fruitful partnership with POSCO International and to delivering world-class infrastructure that strengthens global energy security, reduces emissions, and improves the lives of millions of people around the world.”
Aiming for FID
With three liquefaction trains commercially contracted, strong support from governments and capital markets, and key federal, state, and municipal permits in place across the LNG project and the Sierra Madre pipeline, Mexico Pacific is aiming for a positive final investment decision (FID).
Together, these developments comprise the largest private investment in Mexico and a foundational pillar of the Sonora Plan that promotes clean energy development, investment, and economic prosperity for the region.
Mexico Pacific’s core project, the 15 mill tonnes per annum Saguaro Energía LNG facility, is claimed to be the most advanced LNG development project on the West Coast of North America.
The project will achieve significant cost and logistical advantages resulting in the lowest landed price of North American LNG into Asia by leveraging low-cost natural gas sourced from the nearby Permian Basin and a significantly shorter shipping route avoiding Panama Canal transits.
In addition, Mexican gas developer, Amigo LNG, part of Singapore’s LNG Alliance Group, has signed a binding heads of agreement (HoA) with OQ Trading, Oman’s state-owned trading company, for the supply of LNG.
The LNG will be produced at Amigo’s liquefaction plant at Guaymas, Sonora, Mexico.
This key move paves the way for long term LNG supply targeting the rapidly growing Asian market, Amigo said.
LNG Alliance CEO, Muthu Chezhian, explained: “Securing the offtake agreement with a leading NOC partner like OQT strengthens our position as a reliable and responsible global energy provider.
“We are advancing rapidly in delivering the strategically located Amigo LNG project, expanding our portfolio of lower carbon energy solutions to drive the energy transition, and we remain committed to supporting our customers and partners every step of the way,” he said.
Wail Al Jamali, OQT CEO, added: “We are pleased to enter into this HoA with a trusted project developer in Amigo LNG.
“The offtake represents a significant step in the growth of our LNG portfolio, allowing us to deliver LNG to our customers within the Asia/Pacific region,” he said.
Amigo LNG is a large scale 7.8 mill tonnes per annum liquefaction and export facility on Mexico’s west coast, developed in close partnership with the State of Sonora and the Port of Guaymas in Sonora, Mexico.
