Oil and gas company Mexico Pacific has signed a collaboration agreement with the government of the Mexican state of Sonora for its liquified natural gas (LNG) project there.

Located in Puerto Libertad, Sonora, the Saguaro Energia LNG facility will have a production capacity of 15 million tonnes per annum (mtpa).

The project, which is expected to be completed in 2026, was announced by the Mexican government earlier this year at the North American Leaders’ Summit.

It is a crucial component of the Sonora Plan, a nearshoring and renewable energy infrastructure development initiative.

The LNG project, according to Mexico Pacific, is the biggest foreign private investment in Mexican history.

Mexico Pacific CEO Ivan Van der Walt said: “We are pleased to enhance our strategic relationship with the Government of Sonora as we prepare to commence construction of our Saguaro Energia LNG facility, supported by Mexico’s skilled workforce and our local communities.

“We appreciate the continued support of President López Obrador and Governor Durazo as we work together to position our project, and the State of Sonora, to lead the way in the production of cleaner, more affordable energy.”

Earlier this month, Mexico Pacific signed a 20-year LNG supply deal with China’s Zhejiang Energy International.

Under the agreement, Mexico Pacific will sell 1mtpa LNG from the Saguaro Energia plant to Zhejiang Energy.

The company signed a similar agreement for 2mtpa LNG with Exxon Mobil in February this year.