Woodside signs a two-decade-long deal with Mexico Pacific for LNG acquisition

Woodside, an Australian oil and gas company, has entered into a significant long-term arrangement for the acquisition of LNG from Mexico Pacific. The contract ensures that Woodside will secure 1.3 million tonnes of LNG annually, which roughly translates to 18 shipments each year, and the term of this agreement spans two decades. The LNG procurement will be conducted from the Saguaro Energia LNG project situated in Sonora, Mexico, with the financial terms being free-on-board and the pricing having a correlation with the gas indices of the United States.

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According to statements from Woodside's CEO, Meg O’Neill, the company's strategic plan includes enhancing the scale and flexibility of its portfolio by augmenting its own LNG supply with that procured from external sources. This allows for a more dynamic approach to customer service and augments the company’s LNG trading operations.

The deal with Mexico Pacific not only introduces a fresh source of LNG into Woodside's trading mix but also strengthens the company's geographical spread across the Pacific Basin, further cementing its foothold in Mexico. Additionally, the strategic location of the Mexico Pacific’s Saguaro Energia LNG Project on Mexico’s Pacific coast offers advantageous access to pivotal markets located in Asia.

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According to the article by Procurement Resource, Woodside has secured a long-term deal with Mexico Pacific for the annual purchase of 1.3 million tonnes of LNG from the Saguaro Energia project in Mexico. This deal, lasting 20 years, is set to enhance Woodside's LNG portfolio and trading operations, linking prices to US gas indices and expanding their reach in the Pacific and Asian markets. CEO Meg O’Neill highlighted the strategic significance of diversifying supply sources and the geographical benefits of the project's location.