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Mexico's First LNG Terminal Receives Inaugural Cargo

Mexico's first liquefied natural gas (LNG) import terminal received its first LNG shipment Thursday and is scheduled to begin commercial operations in October. Terminal de LNG de Altamira, a joint venture between Royal Dutch Shell plc (50%), Total and Mitsui (each 25%), announced the arrival of the 138,000-cubic-meter shipment at the facility near Tampico, Tamaulipas, Mexico on the country's Northeast coast.

The Shell-owned LNG cargo was delivered to the regasification terminal by the Shell-operated SS Gracilis, after a 14-day journey over 6,257-nautical miles from the Nigeria LNG plant in Africa. The arrival of the cargo signals the start of the commissioning phase at Altamira. Subsequent LNG cargoes will be delivered by both Shell and Total, as holders of 75% and 25%, respectively, of the terminal's capacity rights.

"Altamira is the first energy infrastructure project of its kind in Mexico and the arrival of the first LNG cargo marks the end of the terminal's construction and the start of the commissioning phase," said Mateo Lopez-Colome, the managing director of terminal. "We are proud to have reached today's milestone safely, on-time and within budget, and we now look forward to the successful completion of the commissioning phase and the start of commercial operations."

Once fully operational, the terminal will provide Mexico with an additional source of energy, which will further strengthen the country's security of supply. LNG deliveries will also support Mexico's energy policy by fueling new power generation to meet an expected growth in demand. Mexico's power authority, Comision Federal de Electricidad (CFE), has contracted to purchase 5.2 billion cubic meters of regasified LNG per year from Altamira (equivalent to 3.9 million metric tons of LNG per year), which will be used for power generation to support existing and future industry in the region.

Altamira joins a small but rapidly growing group of LNG import projects in North America. The only other terminals currently in operation include Excelerate's Gulf Gateway LNG terminal offshore Louisiana, Trunkline LNG's terminal in Lake Charles, LA, El Paso's Elba Island, GA, terminal, Dominion's Cove Point terminal in Lusby, MD, and Suez's LNG facility in Everett, MA. As many as 98 other import projects, including expansions, are planned. Many are unlikely to be built because of local opposition and competition for limited available LNG supply.

There are six other LNG import projects planned in Mexico, including one planned by a Tidelands Oil and Gas Corp. affiliate off the Northeast coast, not far from Altamira. Only two other LNG projects have been approved by Mexican regulators: Sempra and Shell's Energy Costa Azul LNG project in Baja California Norte and Chevron's Terminal GNL Mar Adentro near the South Coronado Islands offshore Tijuana in Baja California Norte.

The Altamira LNG project consists of two 150,000 cubic-meter LNG storage tanks, regasification facilities with 500 MMcf/d of peak sendout capability, and pipelines to connect to the existing pipeline system in Tamaulipas. The project also includes marine installations, allowing specially designed 180,000-cubic-meter carriers to supply LNG to the terminal.

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