NFE and Pemex finalize US$1.5bn Lakach gas export deal

Mexican oil and gas giant Pemex and New Fortress Energy signed a US$1.5bn investment deal to develop the Lakach deepwater gas field off Veracruz, the state company said in a release.

Pemex expects to produce 300Mf3/d (million cubic feet per day) at the field over 10 years starting in 2024. New Fortress has committed to spud seven offshore wells in the area over two years with an expectation to produce competitive, low-cost LNG, it said in a separate release.

New Fortress will invest the new sum to start developing the dormant field in exchange for a fee for every gas unit delivered, both companies said. Up to 190Mf3/d will then be sold back to NFE, which plans to liquefy the volume through a floating LNG production hub and sell it in the international market. An initial 1.4Mt/y of LNG production capacity will be expanded to 7Mt/y, New Fortress said.

The remaining gas production, as well as any condensate output, will be sold by Pemex in the Mexican market.

Pemex invested US$1.4bn at Lakach in the early 2010s, but did not reach commercial production. The field's development has been suspended since 2016. However, both firms said they see great potential in its surrounding area, with the neighboring Kunah and Piklis fields becoming possible targets for further development.

Taken together, the area around Lakach could hold some 3.3Tf3, comprising "one of the most significant undeveloped offshore natural gas resources in the Western hemisphere," New Fortress said.