Mexico Pacific Ltd said on July 5 it has struck a 20-year deal to sell a million metric tons of LNG annually from its Saguaro Energia export plant on west coast of Mexico to China's Zhejiang Energy.
The contract is the latest signed by Chinese LNG importers with producers including Qatar and the U.S. after market volatility last year pushed Asian spot LNG prices to record highs.
Mexico Pacific CEO Ivan Van der Walt said in a statement the new agreement would allow Mexico Pacific to "further support the growing energy requirements" of Zhejiang province, one of the largest provincial economies in China.
A Zhejiang Energy official said the contractual supplies will be on free-on-board basis with first shipment in 2027, which gives the company the flexibility to either supply the fuel to China or elsewhere.
Mexico Pacific said its Saguaro Energia plant offers the lowest landed price of North American LNG into Asia by leveraging low-cost gas from the Permian Basin, and a significantly shorter shipping route avoiding the Panama Canal.
Zhejiang Energy Group is one of China's second-tier LNG players, which are local government-backed city gas distributors that have joined the global gas market alongside the country's dominant state traders.
Its Deputy General Manager Chai Xiqiang said the agreement with Mexico Pacific was an "important step" in further diversifying its energy supply portfolio.
Zhejiang Energy owns 51% stake in an LNG receiving terminal in east China's Wenzhou and had in 2019 secured a 20-year supply agreement with Exxon Mobil.
Among other long-term contracts, China's ENN Natural Gas last month signed a more than 20-year deal with Cheniere Energy that will supply it with 1.8 million tons of LNG a year from mid-2026 onwards.
China Gas Holdings, one of China's largest independent gas distributors, agreed to two 20-year LNG supply contracts with U.S. exporter Venture Global for a total offtake of 2 million tons of the fuel per year.
State-run Sinopec and China National Petroleum Corporation (CNPC) also signed deals with QatarEnergy to take 4 million tons a year of LNG for 27 years, the longest LNG agreements to date.
Recommended Reading
Amplify Updates $142MM Juniper Deal, Divests in East Texas Haynesville
2025-03-06 - Amplify Energy Corp. is moving forward on a deal to buy Juniper Capital portfolio companies North Peak Oil & Gas Holdings LLC and Century Oil and Gas Holdings LLC in the Denver-Julesburg and Powder River basins for $275.7 million, including debt.
Obsidian to Sell Cardium Assets to InPlay Oil for US$225MM
2025-02-19 - Calgary, Alberta-based Obsidian Energy is divesting operated assets in the Cardium to InPlay Oil for CA$320 million in cash, equity and asset interests. The company will retain its non-operated holdings in the Pembina Cardium Unit #11.
Westgate Energy Adds to Mannville Stack Assets in Canada
2025-03-11 - Westgate Energy Inc. is buying Mannville Stack-focused assets in Alberta for CA$7 million from an undisclosed private oil and gas company.
Constellation Energy Nearing $30B Deal for Calpine, Sources Say
2025-01-08 - Constellation Energy is nearing a roughly $30 billion deal to acquire power producer Calpine that could be announced as early as Jan. 13, sources familiar with the matter said.
PE Firm Northleaf to Divest Interests in Spanish Solar Farm
2024-12-31 - Private equity firm Northleaf Capital Partners acquired a controlling interest in the NCP Solar Mula farm in 2018.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.