ExxonMobil Signs LNG Sales Deal With Mexico Pacific to Supply Asia

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Researched by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) has signed a long-term deal to purchase liquefied natural gas (LNG) from Mexico's west coast for Exxon's Asian markets.

ExxonMobil LNG Asia Pacific has executed a 20-year sales and purchase agreement (SPA) with Mexico Pacific (Houston, Texas) to import 2 million tonnes per annum (MPTA) of LNG on a free-on-board basis from the first two trains at Mexico Pacific's planned facility in Puerto Libertad, Sonora. The deal also includes an option for 1 million MPTA from Train 3.

Mexico Pacific's Saguaro LNG project at the proposed facility has the designed capacity to export 14.1 MPTA of LNG. The location of this facility allows Mexico Pacific to obtain natural gas from the Permian to be easily exported to Asia. Compared with loading berths in the Gulf of Mexico, the loading at Sonora would not require vessels to go through the Canal of Panama and would set a straight route to Asian LNG markets, reducing transportation time. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production project and plant databases can click here for a plant profile, and click here to see related project reports.

"We are pleased to announce these long-term SPAs with ExxonMobil," Ivan Van der Walt, chief executive officer of Mexico Pacific, said in a press release. "We have reached a critical point on contract volumes required for FID [final investment decision] on our first two trains and will now shift focus to close contracting on the significant commercial momentum in place for a subsequent Train 3 FID. With natural gas playing a critical role in the quest for global energy security and the energy transition, we remain committed to supplying vital energy for decades. As we position for FID on the first two trains, we will also commence advanced engineering with Bechtel."

Despite the Saguaro project, which aims to transport natural gas from the Permian to be exported, Mexico also is a natural gas producer--as well as a major natural gas importer from the U.S.

Last year, the Central American nation produced 4.7 billion cubic feet per day of natural gas, on par with previous years. Out of that volume, about 65% came from associated gas production. Most of Mexico's associated gas comes from offshore oil developments, while non-associated gas production mainly originates from inland fields.

Despite its local production, Mexico also imports significant volumes of natural gas from the U.S. to satisfy its domestic industry. Since 2009, Mexico's natural gas imports from the U.S. have increased from 927 million cubic feet per day to 5.9 billion cubic feet per day in 2021. Meanwhile, between January and November last year, Mexico imported 5.7 billion cubic feet of natural gas per day from the U.S. These imports happen through pipeline networks connecting the U.S. and Mexico.

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