Coastoil, PEMEX Sign Ixachi Contract

Coastal Contracts secured a large-scale engineering, procurement and construction contract with PEMEX that expands its role in the development of the Ixachi onshore gas field, one of Mexico’s most strategic natural gas assets. The agreement, signed on December 19, 2025, as reported by Malaysian media outlets, has an aggregate value of approximately US$1.14 billion and was awarded to a consortium led by Coastoil Dynamic, Coastal’s Mexican joint-venture company, alongside Sistemas Integrales de Compresión and Nuvoil.

According to filings disclosed by Coastal Contracts to Bursa Malaysia and reported by Malaysian and international media, Coastoil Dynamic will act as consortium leader and will be responsible for contract administration, billing and receipt of payments. All financial interest and economic benefits from the project will be fully attributable to the Mexican joint venture. Under the contract, the consortium will carry out the EPC of a new gas sweetening plant with a processing capacity of 150MMcf/d at the Ixachi Field, as well as the design, construction and commissioning of permanent associated infrastructure.

In addition to the sweetening plant, the scope includes the construction of a new separation facility capable of processing up to 900MMcf/d of gas and 56Mb/d of oil, along with a new condensate pipeline for oil transportation. The agreement also includes gas sweetening services for a period of eight years and ten months, with construction timelines for the various facilities ranging between 300 and 517 days. The service period will begin once the gas sweetening plant is completed and formally accepted.

While Coastal and its partners have been active in the Ixachi Field since 2021, the company has clarified through disclosures and subsequent reporting that this contract is not a renewal of the original agreement awarded four years ago. The initial contract, signed in January 2021, covered the EPC, operation and maintenance of an onshore gas sweetening facility at Ixachi and was later extended through addenda to increase capacity and prolong service periods. That earlier agreement established the operational presence of Coastoil Dynamic in Mexico and laid the foundation for the long-term relationship with PEMEX. The December 2025 contract, however, represents a new and larger phase of development. Media outlets such as The Star, The Malaysian Reserve and The Edge Malaysia have highlighted that the new agreement expands both the infrastructure footprint and the financial scale of Coastal’s participation, adding major separation capacity, new pipelines and a longer-term integrated services component that was not part of the original 2021 scope. As such, the project is widely viewed as a fresh EPC and services contract that builds on prior experience rather than a simple extension of existing work.

Under the terms of the agreement, PEMEX is required to establish a trust account within 30 business days of signing to facilitate payments to the consortium, with funding sourced directly from the sale of hydrocarbons produced at the Ixachi Field. Coastal Contracts stated that the contract will not affect its issued or paid-up capital, but is expected to contribute positively to earnings and net assets from the 2026 financial year onward and throughout the duration of the contract.

Executive chairman Ng Chin Heng described the award as a reflection of PEMEX’s continued confidence in the group’s technical capabilities, operational performance and long-standing partnership with Nuvoil in Mexico. He added that the deal strengthens Coastal’s strategic role within Pemex’s production value chain and supports Mexico’s broader objectives to stabilize and expand domestic natural gas processing capacity.

Ixachi is considered one of PEMEX’s most important onshore discoveries in recent decades and plays a central role in Mexico’s efforts to reduce natural gas imports. The scale and structure of the new Coastal-led contract underscore Pemex’s reliance on specialized private-sector partners to deliver complex midstream and processing infrastructure as it seeks to maximize the value of its gas resources amid financial and operational constraints.