NEW YORK — New Fortress Energy (NFE) has finalized agreements with Pemex to develop an integrated upstream and natural gas liquefaction project offshore Veracruz, southeast Mexico.
This includes development of the deepwater Lakach Field, one of the largest non-associated gas fields in the Gulf of Mexico.
Wes Edens, chairman and CEO of NFE, said, “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.”
The Lakach facility is one of five FLNG units NFE plans to deploy in the next two years, adding about 7 MMt/year liquefaction capacity to the global market.
NFE will produce the gas and condensate from the Lakach field for Pemex, with the latter reimbursing the company for each unit of production delivered. The fee is based on a contractual formula similar to industry-standard gross profit-sharing agreements between the upstream service provider (in this case NFE) and the owner of the hydrocarbons (Pemex).
In addition, NFE has the right to purchase, at a contracted rate, sufficient volumes for its FLNG unit, with Pemex selling remaining natural gas volumes and all of the produced condensate to customers onshore.
Pemex discovered Lakach in 2007 and continued exploration and development activities thereafter for a while before it suspended all work on the project due to the oil price collapse in 2014.
However, Mexico’s current President López Obrador has stated that completing the development is of national interest.
Lakach could produce for about 10 years, with tie-in potential from development of the nearby Kunah and Piklis fields, which would lift the overall resource potential to 3.3 Tcf.