Woodside Energy will buy 1.3 million tonnes per annum of liquefied natural gas from Mexico Pacific Limited over the next two decades, as it seeks to build its presence in the Pacific region.
Woodside Energy will buy 1.3 million tonnes per annum of liquefied natural gas from Mexico Pacific Limited over the next two decades, as it looks to build its presence in the Pacific region.
The Perth-headquartered producer will buy around 18 cargoes of LNG from Mexico Pacific each year over a 20-year span, in a move which Woodside says will build global scale and flexibility in its portfolio.
The LNG will be produced from Saguaro Energia LNG project in Mexico’s Sonora state, with the deal subject to a final investment decision being taken on that project’s third train.
The FID is expected in the first half of 2024, with commercial operations expected to begin in 2029.
Woodside chief executive Meg O'Neill said the LNG would support the company’s expansion in the region.
“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,” she said.
“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 project is located on the Pacific coast of Mexico, providing proximity to key markets in Asia.”
Woodside is developing the Trion deepwater oil field in the Gulf of Mexico, off Mexico's east coast, towards production in 2028.
Woodside will purchase LNG from Saguaro Energia on a free-on-board basis at prices linked to US gas indices.
Mexico Pacific president Sarah Bairstow said the Woodside deal highlighted the value proposition on Mexico’s west coast.
“We are delighted to welcome Woodside, one of the most established global LNG market participants, as a foundation customer of train three, further validating the value of west coast Mexican LNG,” she said.
“We look forward to continuing our collaborative relationship with Woodside to bring additional supply online to address critical energy security and energy transition needs.”
Earlier this week, Woodside signed the oil and gas decarbonisation charter at the COP28 summit in the UAE, committing to a net zero target by 2050 or sooner.
The company has strongly endorsed the role of natural gas as a transition fuel for decades to come, with Ms O'Neill recently telling a World Energy Cities Partnership event she believed it would be generations before gas ceased to be part of the world’s energy mix.
Closer to home, Woodside’s proposed solar farm in the Pilbara received approval today from the Regional Joint Development Assessment Panel.
The project would supply energy to the Burrup Peninsula and its Pluto LNG plant.