03 August 2023
Mexico Pacific and ConocoPhillips (NYSE: COP) announced today that they have signed sales and purchase agreements for ConocoPhillips to offtake approximately 2.2 million tonnes per year (MTPA) in aggregate of liquefied natural gas (LNG) across trains 1, 2 and 3 of Mexico Pacific’s anchor LNG export facility, Saguaro Energia, located in Puerto Libertad on the west coast of Mexico. ConocoPhillips also has an option to contract further expansion train volumes.
Under the sales and purchase agreements, ConocoPhillips will purchase LNG on a free on-board basis over a term of 20 years. When fully operational, the first phase of the facility will have three trains with a combined capacity of 15 MTPA.
“We are delighted to welcome ConocoPhillips as yet another world-class partner for Trains 1, 2 and 3,” said Ivan Van der Walt, Chief Executive Officer of Mexico Pacific. “While our sales volumes exceed our Train 1 and 2 FID requirements, we are excited to move into oversubscribed territory with one of the strongest Permian Basin and LNG market participants in the market – a validation of our project’s fundamentals and position. We look forward to continuing the collaborative relationship we have with ConocoPhillips as we focus on delivering a final investment decision (FID) on our first two trains with Train 3 to follow shortly thereafter.”
“ConocoPhillips is excited to pursue this opportunity with Mexico Pacific as we continue to focus on LNG market development to meet growing global natural gas demand,” said Bill Bullock, Executive Vice President and Chief Financial Officer. “LNG is a fuel that is crucial to providing reliable, lower-carbon energy for the long term. Expanding our LNG footprint with agreements like this further enhances a balanced, diversified, and attractive portfolio as we progress our global LNG strategy.”
“We’re proud to be the first project to have an initial FID independently anchored by three majors,” said Sarah Bairstow, President & Chief Commercial Officer at Mexico Pacific. “This unprecedented market milestone is a testament to our compelling ability to bridge competitive Permian Gas with the largest LNG market, Asia, free of Panama Canal risk and unnecessary incremental shipping emissions and costs when compared to the US Gulf Coast. While trains 1 and 2 sales are now closed, we remain committed to providing further LNG supply to meet global energy security and energy transition needs and will now turn to execute against the contracting momentum in place for a subsequent train 3 FID as quickly as possible.”
About Mexico Pacific
Mexico Pacific’s anchor project, the 15 MTPA Saguaro Energia LNG Facility, is the most advanced LNG development project on the West Coast of North America. The Saguaro Energia LNG Facility achieves 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 transit risk for Asian markets. More information can be found at http://www.mexicopacific.com.