Woodside Energy Group Ltd has finalized a sales and purchase agreement with Mexico Pacific Limited for the acquisition of 1.3 million metric tons per annum (mtpa) of liquefied natural gas (LNG) over a 20-year period. The LNG will be sourced from the Saguaro Energia LNG Project, situated in Puerto Libertad, Sonora, Mexico. The agreement, which is linked to U.S. gas indices, is contingent on Mexico Pacific's final investment decision (FID) on the proposed third train at the Saguaro Energia LNG Project, expected in the first half of 2024. Commercial operations are slated to commence in 2029.

Woodside CEO Meg O’Neill emphasized the strategic significance of this deal, stating that it complements Woodside's produced LNG supply, enhances portfolio flexibility, and contributes to the optimization of LNG trading activities. This agreement not only introduces a new source of LNG into Woodside's trading portfolio but also expands geographic diversification in the Pacific Basin and strengthens its presence in Mexico.

The Saguaro Energia LNG Project, located on the Pacific coast of Mexico, is strategically positioned to cater to key markets in Asia. Woodside's collaboration with Mexico Pacific aligns with its broader objective of building global scale and flexibility in its LNG portfolio, considering the anticipated strong long-term demand for LNG.

Earlier agreements with ConocoPhillips, Shell Eastern Trading, and ExxonMobil underscore the growing traction and commitment to the Saguaro Energia LNG facility. Mexico Pacific's emphasis on cost and logistical advantages, leveraging low-cost natural gas from the nearby Permian Basin and a shorter shipping route to Asian markets, positions the Saguaro Energia LNG Facility as a competitive player in the LNG landscape. The collaborative relationship between Mexico Pacific and Woodside is seen as a pivotal step in addressing critical energy security and energy transition needs.