The Investment Promotion and Protection Agreement signed yesterday in Mexico City by Australian industry minister Ian Macfarlane and Mexican secretary for the economy Fernando Canales provides a framework to boost investment between the two countries.

Two-way trade and investment flows between Australia and Mexico are currently modest. McFarlane said the IPPA will join a memorandum of understanding on energy co-operation signed in January to take that commercial relationship to the next level.

"It will give investors in both countries greater clarity and confidence in the investment environment in which they are operating," he said.

"The next step is formalising the relationship with a strategic energy partnership based on our ability to supply LNG and the potential for Australian miners to invest in Mexican projects."

LNG supply into markets along the west coast of the US represents a considerable economic opportunity for Australia.

Shell has already committed to taking its share of gas from the Gorgon LNG project off Western Australia’s North West Shelf through the Energia Costa Azul terminal in Baja California, where it holds 50% of the capacity rights.

Similarly, Chevron plans to use its share of LNG from Gorgon for its proposed terminal offshore from Tijuana.