Mexican state oil company Pemex expects a key offshore natural gas field located in the deepwater Gulf of Mexico will add significant output after inking a service contract on Monday, part of a push to grow local output while reducing imports.
Pemex announced in a statement that the deepwater Lakach field will pump 300 million cubic feet (MMCF) of gas per day over a 10-year horizon, after the state-run firm signed a service contract with U.S. liquefied natural gas company New Fortress Energy.
Last month, Mexico's oil regulator approved a plan for developing the once-abandoned natural gas project.
Lakach is believed to hold up to 937 billion cubic feet of gas reserves, but cost pressures put development on hold for six years.
President Andres Manuel Lopez Obrador has sought to prioritize energy self-sufficiency during his term, even as Mexico for decades has met most of its gasoline and natural gas demand through imported supplies, mostly from U.S. producers.
Gas production at Lakach is expected to begin in the first quarter of 2024, following initial investments of $1.4 billion by Pemex and $1.5 million by New Fortress Energy NFE.O.
The two companies signed a separate contract also on Monday agreeing that Pemex will sell 190 MMCF daily to New Fortress with the remaining 110 MMCF per day reserved for domestic consumption.
Mexico's oil regulator approved the nearly $1.8 billion Lakach plan last month, up from $1.5 billion initially estimated.
Partnering with oilfield service providers allows Pemex to retain full control, but does not permit sharing of risks or rewards.
Pemex added it will study gas fields on the periphery of Lakach for possible synergies.
Agustin Diaz Lastra, the former Pemex official who was recently tapped to lead the regulator, expressed optimism for the project's development last month.
(Reuters - Reporting by Brendan O'Boyle; Editing by David Alire Garcia and David Gregorio)