Australia’s Woodside has signed a sales and purchase agreement with Mexico Pacific to purchase 1.3-million tonnes a year, equivalent to about 18 cargoes a year, of liquefied natural gas (LNG) for 20 years.
The agreement, Woodside says, is consistent with its strategic objective of building global scale and flexibility in its LNG portfolio.
“As we deliver on our strategy, we aim to complement Woodside’s produced LNG supply with third parties’ volumes, giving us greater scale and portfolio flexibility to serve our customers, while optimising our LNG trading activities,” says Woodside CEO Meg O’Neill.
“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.”
Mexico Pacific’s Saguaro Energia LNG project is located on the Pacific coast of Mexico, providing proximity to key markets in Asia.
Under the SPA, Woodside will purchase the LNG from the Saguaro Energia LNG project, located in Puerto Libertad, Sonora, Mexico on a free-on-board basis with pricing linked to US gas indices.
The SPA is subject to Mexico Pacific taking a final investment decision (FID) on the proposed third train at the Saguaro project. The FID is expected in the first half of 2024 and commercial operations are targeted to commence in 2029.