Woodside inks 20-year LNG deal with Mexico Pacific

Offshore oil rig with beautiful orange sunset behind it (mexico woodside)
Image: Shutterstock

Woodside Energy has signed a deal with energy company Mexico Pacific to purchase 1.3 million tonnes of liquefied natural gas (LNG) per annum for two decades to boost production and optimise operations.

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Woodside CEO Meg O’Neill said, “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.

“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 deal, Woodside will buy the LNG from Mexico Pacific’s Saguaro Energia LNG project, located in 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 Energia LNG Project. The FID is expected in the first half of 2024 and commercial operations are targeted to commence in 2029.

“We are delighted to welcome Woodside, one of the most established global LNG market participants, as a foundation customer of Train 3, further validating the value of west coast Mexican LNG,” Mexico Pacific president Sarah Bairstow said.

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“We look forward to continuing our collaborative relationship with Woodside to bring additional supply online to address critical energy security and energy transition needs.”

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