New Fortress Energy Inc. (NFE) has finalised its agreements with Petróleos Mexicanos (Pemex), Mexico’s state-owned oil company, to develop and operate an integrated upstream and natural gas liquefaction project off the coast of Veracruz in southeastern Mexico.
The two companies have established a long-term strategic partnership, expressly supported by Mexican president Andrés Manuel López Obrador, to complete the development of the Lakach deepwater natural gas field, one of the largest non-associated gas fields in the Gulf of Mexico.
NFE will invest in the continued development of the Lakach field over a two-year period by completing seven offshore wells. In addition, NFE will deploy to the Lakach field its 1.4 MTPA Sevan Driller FLNG unit, which is currently undergoing conversion in a shipyard in Singapore, to liquefy much of the produced natural gas.
NFE will produce natural gas and condensate in exchange for a fee based on a contractual formula for every unit of production delivered to Pemex. NFE will have the right to purchase, at a contracted rate, sufficient volumes for its FLNG unit, and Pemex will sell the remaining natural gas volumes and all of the produced condensate to its customers onshore.
NFE and Pemex believe the Lakach field will yield approximately 10 years of production, with the possibility of significantly extending the reserve life if the nearby Kunah and Piklis fields are developed. Coupled with these nearby fields, the area around Lakach has a total resource potential of 3.3trn cubic feet.
“This arrangement represents the first of what we consider to be an ideal formula for the deployment of NFE’s FLNG units to stranded gas plays around the world – one that combines gas for domestic use with low-cost supply for LNG export into global markets,” said Wes Edens, Chairman and CEO of NFE.