New Fortress to partner in Mexico offshore gas project

New Fortress to partner in Mexico offshore gas project

Energy infrastructure developer New Fortress Energy (NFE) said July 5 it had entered into a strategic partnership with Mexico’s state-controlled Pemex to develop the Lakach natural gas field in the Gulf of Mexico offshore Veracruz.

Under terms of the agreement, NFE will invest in the development of Lakach over the next two years by drilling seven offshore wells and deploying a 1.4mn mt/yr floating LNG unit to liquefy most of the produced volumes for export by NFE. The remaining volumes would be used by Pemex to meet demand in Mexico’s onshore domestic market.

“This is the first of a number of offshore development opportunities that leverage what we think is an ideal formula for offshore gas assets around the world – one that combines gas for domestic use with gas for export,” New Fortress CEO Wes Edens said. “We appreciate the continued support of president Andres Manuel Lopez Obrador, admire his resolve to deliver reliable energy to the people of Mexico, and value the opportunity to partner with Pemex to enhance global energy security.”

The Lakach field – discovered by Pemex in 2007 and estimated to contain in-place reserves of about 1.1 trillion ft³ – could yield 10 years of production, and more if the nearby undeveloped Kunah and Piklis fields, thought to contain a combined resource potential of 2.2 trillion ft³, are brought into the project in the future.

Separately, New Fortress also said it had entered into an agreement with CFE, Mexico’s state-owned electric utility, to expand NFE’s supply of natural gas to several CFE power generation facilities in Baja California Sur on Mexico’s west coast, sell NFE’s 135 MW La Paz power plant to CFE and create a new LNG hub offshore Altamira, in Tamaulipas province. 

The hub would consist of two 1.4mn mt/yr liquefaction units deployed by NFE and supplied with feedgas from CFE using the utility’s existing pipeline infrastructure. CFE would share in the production and marketing of a portion of the LNG volumes produced at the hub.

“We are pleased to expand our strategic alliance with CFE, which will enhance clean energy security for Mexico and enable the construction of a new LNG hub off the coast of Altamira,” Edens said.

All of NFE’s transactions with Pemex and CFE remain subject to customary closing conditions and the finalisation of related agreements.