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Rendering of Saguaro LNG plant (Image: Mexico Pacific)

Shell signs third supply deal with

MPL for LNG from Saguaro Energia

SHELL Eastern Trading, a subsidiary of Shell final investment decision (FID) on the first two
(UK), has signed a 20-year LNG supply contract trains, we are also closing out contracting across
with Mexico Pacific Ltd (MPL), the developer of the significant commercial momentum in place
the Saguaro Energia export project. for Train 3 to ensure that a subsequent Train 3
Under the agreement, Shell Eastern Trad- FID can follow as quickly as possible.”
ing will purchase 1.1mn tonnes per year (tpy) Chuck Davidson, MPL’s chairman and a
of LNG from the third train of MPL’s anchor partner at Quantum Energy Partners, spoke
facility, Saguaro Energia, which is slated for similarly: “Mexico Pacific is uniquely facilitat-
construction in Puerto Libertad in the state of ing the connection of low-cost Permian Basin
Sonora. It will buy these volumes from a unit of gas with the lower-carbon fuel needs of Asia
MPL on a free on board (FOB) basis, according to deliver de-risked and affordable new LNG
to a company statement dated March 27. supply, resulting in additional energy security
This is the third time the two firms have for the region,” he commented. “We are pleased
signed a deal, MPL noted. Last July, the parties to have the ongoing support of Shell, one of the
concluded two 20-year agreements for the deliv- largest market participants, to underpin invest-
ery of 2.6mn tpy of LNG from each of the first ment in critically needed new supply.”
two trains of the natural gas liquefaction plant. For his part, Steve Hill, executive VP of
According to previous reports, the Saguaro energy marketing at Shell, remarked: “LNG is
Energia plant will begin operating in 2026 and an increasingly important pillar of global energy
will process gas piped from Permian basin fields security. Investment in liquefaction projects is
in the US states of Texas and New Mexico across needed to avoid a supply-demand gap that is
the border into Mexico. It will eventually have expected to emerge in the late 2020s. We are
three production trains of 4.7mn tpy each, giv- pleased to be working with Mexico Pacific to
ing it a total production capacity of 14.1mn tpy. provide more LNG to the global market.”
Ivan Van der Walt, CEO of MPL, said: “We MPL has already signed separate binding
are delighted Shell has chosen to grow with us, off-take agreements for 8mn tpy of LNG with
building upon their initial 2.6mn tpy commit- several other clients. One of these is Guangzhou
ment from Train 1 and Train 2 to also underpin Development Natural Gas Trading, a subsidi-
more than 20% of Train 3 capacity. Our project ary of China’s Guangzhou Development Group
will provide Asia with low-cost Permian gas, (GDG). The Chinese firm signed a 20-year deal
avoiding the Panama Canal to ensure a shorter for 2mn tpy in April 2022. Another is ExxonMo-
shipping distance to Asia, to achieve lower bil LNG Asia Pacific, a unit of ExxonMobil (US),
transportation emissions and landed pricing which will purchase 2mn tpy on an FOB basis
vs. the US Gulf Coast. As we work to deliver a from the first two trains of Saguaro Energia. ™

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