October 2024, Vol. 251, No. 10
Global News
Global News October 2024
Mexico Pacific Signs 20-Year LNG Deal with POSCO International
Mexico Pacific has finalized a 20-year sales and purchase agreement (SPA) with POSCO International, a leading energy trading company from Korea.
The deal involves POSCO International purchasing 700,000 tons annually of LNG from Mexico Pacific’s Saguaro Energía facility.
The agreement marks a significant step for both companies. POSCO International, known for its extensive role in global energy markets, will receive LNG on a free-on-board basis. The partnership underscores the growing trade relationship between Korea and Mexico, which is bolstered by a comprehensive free trade agreement (FTA) with the United States.
Mexico Pacific’s Saguaro Energía LNG facility, located in Puerto Libertad, Sonora, is set to become a major player in the global LNG market. The first phase of the facility, which will feature three liquefaction trains, aims to deliver competitively priced LNG to Asia.
This project is part of Mexico Pacific’s broader strategy to position Mexico as a leading LNG exporter, leveraging low-cost natural gas from the Permian Basin in Texas.
The deal with POSCO International is a notable development for Mexico Pacific as it advances toward a final investment decision (FID) for the Saguaro Energía facility. The project is expected to drive significant investment and economic growth in the region, contributing to Mexico’s status as the world’s fourth-largest LNG exporter.
“We are delighted to welcome POSCO International as a foundation customer, further validating the strategic value of west coast North American LNG for Korea, one of the world’s largest LNG importing markets,” said Sungbok Park, chief marketing officer of Mexico Pacific. “We look forward to a lasting fruitful partnership with POSCO International and to delivering world-class infrastructure that strengthens global energy security, reduces emissions, and improves the lives of millions of people around the world.”
The Saguaro Energía project represents a major private investment in Mexico and aligns with the Sonora Plan, which aims to foster clean energy advancements and economic benefits for the region.
Golden Pass LNG Seeks Extension for $10 Billion Project
The director of the Golden Pass LNG export project in Texas asked U.S. regulators for a three-year extension to complete construction of the $10 billion project, due to “scheduling uncertainties.”
The QatarEnergy-ExxonMobil joint venture is planning to build an 18-mtpa export project on the coast said the project would not get underway until next year, but the current approval expires in November 2026.
The “goal is to produce first LNG around the end of 2025 with commercial operations following thereafter,” a Golden Pass LNG spokesperson told Reuters. “The extensions we have requested build in time for contingencies.”
“The additional time will allow for the rehiring and remobilization of over 4,000 skilled workers and provide for potential uncertainties such as severe weather or hurricane delays when it may not be safe to have crews on site,” Golden Pass LNG wrote the Federal Energy Regulatory Commission.
Golden Pass LNG asked for the additional three-year period under a FERC provision that allows an extension if a company can show it made good faith efforts to complete a project on time, it said in a letter to FERC.
Construction of the first gas-processing unit is approximately 83% complete, and the second and third processing units are 46% and 31% complete, respectively, the FERC filing said.
Thailand’s PTT Signs 5-Year LNG Supply Deal with Oman LNG
Egypt, the most populous Arab country, is back to being a net importer of natural gas for year, having purchased more than 50 cargoes so far, and seemingly giving up on becoming major supplier to Europe.
The country bought 20 cargoes of LNG through the first deal issued to cover its winter demand since 2018, securing full volumes it was seeking at smaller than expected premiums, according to Reuters.
The Egyptian General Petroleum Corporation (EGPC) has closed the tender on Sept. 12. The purchases aim to cover demand for the fourth quarter of 2024. EGPC has awarded the tender on a six-month deferred payment basis.
“Despite the geopolitical challenges in the region and market tightness, EGPC received offers from more than 15 major players at very competitive rates that were 30%-40% less than expected market prices,” a trading source told Reuters.
In all the agreements are for 17 cargoes to be delivered to a floating terminal in the port of Ain Sukhna, in Red Sea, and three cargoes to Aqaba port in Jordan.
TotalEnergies, Shell, BP and commodities traders Glencore and Gunvor won most of the cargoes.
Texas Shortlists 17 Gas Plant Projects in State Funding
The Public Utility Commission of Texas choose 17 projects, seeking $5.38 billion in government funding, to go forward in a new program to bolster the development of gas-fired power plants, the regulators said.
The state, which has experienced issues several time, involving prolonged blackouts, established the Texas Energy Fund last year to incentivize the build-out of natural gas electricity generation by offering low-interest loans.
The selected projects, totaling nearly 10,000 megawatts in power generation capacity, will advance to the next stage of the fund’s application review process, the Texas PUC said. Approved applicants are expected to receive initial loan payments by Dec. 31, 2025.
The PUC received 72 applications for the loan program, with requests adding up to about $24 billion in funding for projects totaling more than 38,000 megawatts, the PUC said.
NRG Energy, Vistra, Constellation, NextEra and GE Vernova are among the applicants.
EOG Resources to Increase Utica Shale Activity in Ohio
Shale-play producer EOG Resources said it will increase operations in Ohio’s Utica Basin.
EOG Resources has doubled its activity in the Utica year-on-year, operating on 445,000 acres with an average entry cost of around $600 per acre, Chief Operating Officer Jeff Leitzell said the Barclays CEO Energy-Power Conference in New York
“The Utica absolutely has the opportunity to be a foundational play,” Leitzell said. “If we continue to have the success that we expect to, you can expect us to go ahead now and put more capital there.”
EOG is also developing its Dorado natural gas play in the Eagle Ford in southeast Texas. The company has managed record low gas prices in part by deferring a handful of completions to the second half of the year.
“There’s going to be long periods of low pricing with short duration periods of high pricing, and you’ve got to be able to make returns and margins all the way through those periods on the gas side,” Leitzell said.
Colombia Truck Protests Disrupt Pipelines, Threaten Ecopetrol
Protests by truckers over increased diesel prices in Colombia have limited fuel supplies and cut off the nation’s big cities through the use of roadblocks.
The protests, along with attacks on the Cano Limon-Covenas and Bicentenario pipelines has jeopardized the operation of state-run oil company Ecopetrol, the company said. The government maintains that the price increase is fair.
The price per gallon of diesel has jumped US45 cents (1,904 Colombian pesos ) per gallon.
President Gustavo Petro said the increase is fair and that a subsidy in diesel prices should never have been granted, adding that the country will not allow itself to be blockaded, according to Reuters.
Production of hydrocarbons could be affected in the coming days and may affect fuel supplies, Ecopetrol said in a statement, adding that the situation is compounded by social conflict at the company’s Gibraltar gas field.
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