Mexico Pacific and ExxonMobil Fortify LNG Relationship with Fresh Offtake Deal

Mexico Pacific, a prominent LNG project developer, has solidified its collaboration with ExxonMobil LNG Asia Pacific by signing a third long-term Sales and Purchase Agreement (SPA). This latest agreement, covering an additional 1.2 million tonnes per annum (mtpa) of LNG, specifically pertains to Train 3 of the Saguaro Energia project situated on Mexico Pacific's west coast. The continued partnership between Mexico Pacific and ExxonMobil underscores the strategic significance of their alliance in the LNG sector.

ExxonMobil's commitment to procure an additional 1.2 mtpa of LNG from Train 3 is a consequential development, as it stems from the exercise of options for supplementary volumes under separate SPAs inked in January 2023. These earlier agreements encompassed volumes from Trains 1 and 2, reflecting the sustained growth and expansion of the collaboration between the two entities.

In the context of the Train 3 deal, ExxonMobil is slated to acquire LNG on a free-on-board (FOB) basis over a substantial 20-year term. Notably, as part of this agreement, ExxonMobil retains an option to secure an additional 1 mtpa from Train 4, showcasing the flexibility inherent in their long-term arrangement.

This latest SPA with ExxonMobil holds strategic importance for Mexico Pacific, as it extends their valued partnership into the development of Train 3. Despite the ongoing focus on reaching a Final Investment Decision (FID) for Trains 1 and 2, this additional LNG SPA serves as a pivotal step in fulfilling the LNG sales requirements essential for a subsequent Train 3 FID. Anticipated later this year, the Train 3 FID is poised to leverage the progress achieved in contracting and permitting across the terminal and pipeline.

Mexico Pacific's strategic positioning in the LNG market is emphasized by the project's geographical advantage on the west coast, connecting Permian Basin gas to major LNG markets in Asia. With key contracting agreements and permits already in place, the project is positioned to provide a reliable and cost-effective supply of LNG, supporting the global energy transition.

The significance of this collaboration extends beyond immediate commercial transactions. It symbolizes a shared commitment to advancing LNG infrastructure and contributing to the evolving landscape of the energy sector. The collaboration between Mexico Pacific and ExxonMobil reflects a forward-looking approach to meeting the increasing demand for LNG, particularly in key markets across Asia.

The signing of the third long-term SPA between Mexico Pacific and ExxonMobil represents a crucial milestone in their ongoing partnership. The commitment to additional LNG volumes for Train 3, along with the prospect of further expansion to Train 4, underscores the strategic depth and resilience of this collaboration. As the LNG sector continues to play a pivotal role in the global energy transition, alliances such as these contribute significantly to the development of sustainable and reliable LNG infrastructure.