Mexico Pacific and China’s Zhejiang Energy International have signed a 20-year agreement to supply liquefied natural gas (LNG) from the former’s proposed Saguaro Energia export facility in Mexico.

Under the agreement, Mexico Pacific will sell one million metric tonnes of LNG annually from its Saguaro Energia plant in Puerto Libertad, Sonora, to Zhejiang Energy.

Zhejiang will purchase the LNG on a free on-board basis for a period of 20 years.

Mexico Pacific CEO Ivan Van der Walt said: “LNG is an important pillar to China’s energy security needs and its underlying green policy ambitions.

“Zhejiang Energy is the sole gas distributor in Zhejiang province, one of the largest provincial economies in China, and under this new agreement Mexico Pacific will further support the growing energy requirements of this region.”

A Zhejiang Energy official was cited by Reuters as saying that the contractual LNG supplies from the Saguaro Energia export facility are planned to commence in 2027.

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Zhejiang Provincial Energy Group deputy general manager Xiqiang Chai said: “Zhejiang Provincial Energy Group (ZEG) has consistent interest in seeking international upstream energy resources such as natural gas.

“This new long-term agreement with Mexico Pacific is an important step in further diversifying our energy supply portfolio and strengthening ZEG’s natural gas industry. We are excited to be partnering with Mexico Pacific as they work to deliver low-cost LNG to China.”

Earlier this year, Mexico Pacific signed a LNG supply deal with ExxonMobil LNG Asia Pacific, an affiliate of ExxonMobil, from the Saguaro Energia LNG plant.

Scheduled to be commissioned in 2026, the company’s Saguaro Energia LNG facility will comprise three trains and have a combined capacity of 14.1 million tonnes per annum (mtpa).

The project is being developed in phases, with the first phase involving the construction of two 4.7mtpa liquefaction trains, two tanks and one berth.

The second phase will involve the construction of a third 4.7mtpa train.