Nov 16 (Reuters) - U.S. company New Fortress Energy
expects to sign an agreement next week with the Mexican
government for the development of a liquefied natural gas (LNG)
project associated with Mexico's Lakach offshore gas field, a
company executive said on Wednesday.
A $1.79 billion project by state company Petroleos Mexicanos
to develop the once-abandoned Lakach deepwater natural gas
project was approved in October by Mexico's oil regulator in the
first public session chaired by its newly appointed head.
The Gulf of Mexico field holds up to 937 billion cubic feet
of gas reserves, but high costs have hindered development.
Mexico is now trying to bring a partner to share
investment likely through a service contract - a formula used
before the country opened its energy sector in 2013-14 - mainly
to build LNG infrastructure and be able to export the gas.
The Lakach LNG facility is expected to complete construction
in April 2024 and be put in place by the middle of that year,
said New Fortress' Chief Financial Officer Christopher Guinta,
during a gas conference in San Antonio.
Lakach LNG will be New Fortress' third liquefaction plant in
Mexico, following two floating LNG facilities to be installed
near the Gulf Coast port of Altamira next year.
New Fortress last month said it had completed agreements
with Mexico's state power utility Comision Federal de
Electricidad (CFE) as part of an alliance pushed by President
Andres Manuel Lopez Obrador to make better use of Mexico's gas
transportation infrastructure, ramp up domestic output and
eventually export LNG.
The agreements included expanding New Fortress' gas
supply to CFE's power plants, selling New Fortress' La Paz power
plant to CFE and creating the new floating LNG hub off the coast
CFE has in recent years renegotiated several gas
transportation and power contracts after foreign companies
introduced arbitration cases and claims against the state
company for not fulfilling contractual terms.
(Reporting by Marianna Parraga; editing by Grant McCool)