Lakach to Strengthen Natural Gas Development: Rystad Energy

PEMEX announces that after 6 years of being suspended, the deepwater Lakach project will be resumed in collaboration with the American company New Fortress Energy, made possible through a US$1.5 billion investment. The consulting firm Rystad Energy found that Lakach will strengthen Mexico’s natural gas projects, as Mexico risks becoming increasingly dependent on imports from the US.

Without major investments toward new discoveries such as this one, the production of natural gas in Mexico may contract 63 percent by 2030 compared to the level of 2010, remaining at 19MMcf/y. Meanwhile, the demand for the resource will grow 42 percent in the same period, rising to 90.5MMcf/y. This would increase the dependence on imports, predicted the consultancy firm Rystad Energy.

According to Rystad, the widening gap between demand and supply for natural gas underlines the lack of investment and maintenance of the production fields, as well as deficient key developments in recent years. For example, between 2008 and 2022 Mexico discovered fields with 2.9MMboe of prospective resources. Of these areas, those that house 1.6MMboe have already begun to produce, according to CNH data.

This means that there is already relatively little left to develop from what has been discovered, which highlights the importance of exploration for Mexico, the company said. Therefore, the firm applauded the recent agreement between PEMEX and New Fortress to develop Lakach. They stressed that the agreement announced in July represented a separation from the energy nationalism that has characterized the López Obrador administration.

Lakach is a deepwater non-associated gas field located about 70km off the shore of Veracruz, with water depths between 850 and 1,200m. It houses some 150MMboe of resources, as well as additional condensates. In 2012, the development of the field was scheduled and US$1 billion were allocated, but the plan was stopped in 2016 due to an abrupt drop in hydrocarbons prices.

"The entry of New Fortress could herald the beginning of a new chapter for Mexico's upstream sector, which is in dire need of investment to stop declining production," wrote Rystad, adding that the move will provide the opportunity to develop nearby gas fields such as Kunah and Piklis using the same infrastructure.