Exxon Mobil Corporation (NYSE:XOM), the prominent U.S.-based energy company, has entered into a contractual agreement to acquire an additional 1.2 million metric tons per year (MMtpa) of Liquefied Natural Gas (LNG) from Mexico Pacific, based on a free-on-board basis.
This 20-year supply arrangement with ExxonMobil serves as a catalyst for Mexico Pacific to make a crucial final investment decision regarding the expansion of its Saguaro Energia LNG Plant, located on the west coast of Mexico.
Mexico Pacific has confirmed that the successful conclusion of this deal represents the necessary sales commitments required to proceed with the final investment decision on Train 3 of the Saguaro Energia project, expected later in 2024.
The agreement follows ExxonMobil’s utilization of options for additional volumes, exercised under separate sales and purchase agreements inked in January 2023. Under the terms of the aforementioned agreement, ExxonMobil had previously procured 2 million tons per year of LNG from the first two LNG Trains of the Saguaro Energia project. The Saguaro Energia project, valued at $15 billion, has been strategically planned to transport 15 MMtpa of LNG to Asia.
Investors seeking potential opportunities in the energy sector may consider some better-ranked stocks, such as Oceaneering International (NYSE:OII), Vaalco Energy (NYSE:EGY), and Cheniere Energy (NYSE:LNG).
Oceaneering International, a market-leading provider of offshore equipment and technology solutions in the energy industry, projects an increase in free cash flows for 2024, supported by growing market demand for its mobile robotic forklifts and underride vehicles.
Vaalco Energy, an independent energy company engaged in upstream operations with a diversified presence in Africa and Canada, anticipates a promising production outlook due to its extensive inventory of drilling locations in premium Canadian Acreage.
Cheniere Energy, a U.S.-based company focused on LNG export, holds a positive outlook considering the global shift toward cleaner energy solutions for power generation and the heightened demand for LNG, particularly in the Asia-Pacific region.
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Author Stephanie Bédard-Châteauneuf