Lakach is a deep water non-associated natural gas field located in the Gulf of Mexico, around 90km from the Port of Veracruz in south-eastern Mexico.
The project was discovered in 2007 by the Mexican state-owned petroleum company Petróleos Mexicanos (Pemex).
The development of the field was suspended for more than six years but it got back on track in 2022 after Pemex entered into a strategic partnership with energy infrastructure company New Fortress Energy (NFE).
Hydrocarbon production at Lakach is expected to begin in the first quarter of 2024.
Location and site details
Lakach Deep-water Gas Field is located around 90km off the coast of Veracruz in south-eastern Mexico. The site is 136km northwest from Coatzacoalcos (Veracruz) and 60km northeast of Gas Station 5 Lerdo.
Water depth at the site ranges from 850m to 1,300m.
Development history and reserves
After the discovery of Lakach natural gas field in 2007, Pemex proceeded with exploration and development activities. Initially, the Mexican company invested $1.4bn in the project.
The field was discovered by drilling the Lakach-1 well when gas was confirmed in reservoirs of the Lower Miocene age.
However, the company stopped the allocation of capital for the field and further development was halted following the fall in oil prices in 2014.
In November 2022, NFE signed an agreement with PEMEX to complete the Lakach offshore gas field. The agreement includes the development of an integrated upstream and natural gas liquefaction project and the deployment of a floating liquefied natural gas (FLNG) unit at the Lakach field.
Mexican regulator National Hydrocarbons Commission (CNH) also approved a plan to develop the project in October 2022.
The offshore field is estimated to host around 900 billion cubic feet in gas reserves.
The Lakach development will include a subsea manifold cluster configuration with seven subsea wells.
NFE committed to complement the initial investment by allocating an additional $1.5bn for the project and help in completing the seven offshore wells in two years.
The company also plans to deploy its 1.4 million tonnes per year (MTPA) Sevan Driller FLNG unit to the Lakach field to liquefy the majority of the production.
NFE and Pemex expect the Lakach project to have a production life of ten years. However, the production life is expected to increase if the nearby Kunah and Piklis fields are developed.
With these fields, the area around Lakach Field has a total resource potential of 3.3 trillion cubic feet (tcf) of gas.
Sevan Driller FLNG conversion
In October 2022, NFE signed Master Service Agreements with Sembcorp Marine’s wholly-owned subsidiary Sembcorp Marine Rigs & Floaters to convert two Sevan cylindrical drilling vessels to FLNG liquefaction facilities.
The first unit’s hull conversion and fabrication of topsides are expected to be completed in the first half of 2024. The works are being conducted at a shipyard in Singapore.
This converted vessel will be deployed at the Lakach field.
The work on the second FLNG facility will be contracted later.
The two units will have a capacity of approximately 1.4 mtpa, with LNG set to be stored in a separate tanker moored near the facility.
By 2024, NFE plans to deploy five FLNG units to boost liquefaction capacity by more than 7mtpa.
NFE-Pemex agreement details
As agreed, Pemex will receive upstream services from NFE.
NFE will produce gas and condensate and pay a fee to Pemex for every unit of production delivered to the latter.
NFE will also have the right to purchase natural gas from Pemex at a contracted rate for its FLNG unit. Pemex may sell the remaining gas and all gas condensate produced at the field to customers.
Pemex will also retain its ownership and at the end of the contract will assume the ownership of the entire infrastructure.