Mexico Pacific signs 20-year LNG supply deal with China's Zhejiang Energy
(Reuters) - Mexico Pacific Ltd has struck a 20-year deal to sell a million metric tons of liquefied natural gas a year from its Saguaro Energia export plant in Sonora state to China's Zhejiang Energy, it said on Wednesday.
The contract is the latest in a series signed by Chinese LNG importers with producers including Qatar and the U.S. after market volatility last year pushed Asian spot LNG prices to record highs.
Mexico Pacific CEO Ivan Van der Walt said in a statement the new agreement would allow Mexico Pacific to "further support the growing energy requirements" of Zhejiang province, one of the largest provincial economies in China.
Mexico Pacific did not specify when the contract would start, or the pricing of the deal, but said its Saguaro Energia plant offers the lowest landed price of North American LNG into Asia by leveraging low-cost gas from the Permian Basin, and a significantly shorter shipping route avoiding the Panama Canal.
Zhejiang Provincial Energy Group is one of China's second-tier LNG players, which are local government-backed city gas distributors that have joined the global gas market alongside the country's dominant state traders, including PetroChina and CNOOC.
Its Deputy General Manager Chai Xiqiang said the agreement with Mexico Pacific was an "important step" in further diversifying its energy supply portfolio.
Among other long-term contracts, China's ENN Natural Gas last month signed a more than 20-year deal with Cheniere Energy that will supply it with 1.8 million tons of LNG a year from mid-2026 onwards.
China Gas Holdings, one of China's largest independent gas distributors, agreed to two 20-year LNG supply contracts with U.S. exporter Venture Global for a total offtake of 2 million tons of the fuel per year.
State-run Sinopec and China National Petroleum Corporation (CNPC) also signed deals with QatarEnergy to take 4 million tons a year of LNG for 27 years, the longest LNG agreements to date
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