U.S. company New Fortress Energy (NFE), said on Tuesday that it had finalized agreements with the state-owned oil company Pemex to resume gas extraction work in the country’s Lakach offshore natural gas field.

Located 93 km southeast of Veracruz in the Gulf of Mexico, Lakach is a deep water gas field owned by Pemex, and its first deep water development project. It is believed to hold up to 937 billion cubic feet of gas reserves.

In a statement, the U.S. company said it will develop and operate the project, committing to complete seven offshore wells over a two-year period. According to Pemex, production is expected to begin in the first quarter of 2024.

Early in November, the National Hydrocarbons Commission (CNH) approved the plan to develop the abandoned project, which was first authorized in November 2007 with an initial investment of US $1.4 billion. However, due to cost pressures, it was put on hold for six years.

Under the new agreement, NFE committed to provide an additional US $1.5 billion in investment. It will also provide upstream services to Pemex  — services related to exploration and production, as well as natural gas and condensate — the latter a substance not unlike light crude that is extracted from natural gas and can be mixed with heavy crude — in exchange for a fee for every production unit delivered.

In a press statement, NFE said: “The fee is based on a contractual formula that resembles industry-standard gross profit-sharing agreements between the upstream service provider (NFE) and the owner of the hydrocarbons (Pemex).”

The contract also states that Pemex will sell 190 million cubic feet per day to NFE, while the remaining daily 110 million cubic feet will be allocated for Mexican consumption. In a statement, Pemex said that the agreement “[…] represents not only the rescue of an investment that was almost lost for Pemex, but a business that will bring economic benefits to the country.”

The state oil company also said there are other fields on the periphery of the deposits with three times more natural gas. Pemex authorities will begin an evaluation to find the best way to exploit all fields efficiently.

This isn’t the first investment of the U.S. company in Mexico. In October, President López Obrador announced that agreements had been finalized between the state-owned electricity commission CFE and NFE for the purchase of the Amaunet thermoelectric plant in La Paz, Baja California. NFE bought the plant for US $180 million. According to the president, the purchase would resolve the power outages in La Paz and Baja California, guaranteeing power for “eight years and beyond.”

The agreement also includes a supply of natural gas for the CFE plants in Baja California Sur and a supply for the first floating liquefied natural gas hub in Mexico, to be located off the coast of Altamira, Tamaulipas. CFE would supply the requisite feedgas to multiple NFE units, using CFE’s existing and underutilized pipeline capacity, according to a statement in October by NFE.