Mexico's federal electricity commission, Comision Federal de Electricidad (CFE), has extended the time for obtaining bids from companies wanting to construct a liquefied natural gas (LNG) receiving terminal at the Pacific port city of Manzanillo, according to a U.S.-based consultant watching Mexico's energy developments and business wire service reports out of Mexico City. Bids had been due Feb. 7.
Mexico is pursuing development of a LNG terminal that can process up to 1 Bcf/d along the Pacific Coast, with connecting pipelines heading north to the growing greater Guadalajara metropolitan area, and that is just part of the Mexicans' long-range LNG development plans that are reaching out to the broader Pacific Rim, according to the consultant.
CFE is closely tied to the Mexican LNG situation, given its current penchant for building new gas-fired plants and converting old oil-fired plants to combined-cycle facilities in all of Mexico's burgeoning industrial areas and population centers.
There are serious issues about the sizing of any plant that is eventually built -- 500 MMcf/d vs. 1 Bcf/d -- that are made all the more complex by developments inside and outside of Mexico, so CFE is taking more time to develop a more specific design and construction framework, according to George Baker, a Houston-based expert on energy issues in Mexico.
Baker noted that the Alta Mira LNG facility on the Mexican east coast originally had various sizes assigned to it from 350 MMcf/d to 1 Bcf/d before it was finally developed with a 350 MMcf/d capacity. In the case of Manzanillo, there is LNG from Peru contracted through Repsol for up to 500 MMcf/d, and the Mexicans have been looking for another Pacific Basin source for 500 MMcf/d more.
"The whole endeavor in Mexico [which has its own oil and gas supplies] to get into LNG was an action that you could characterize as a hedge against the existing regulatory environment and Mexico's national oil/gas company, Pemex, being unable [or unwilling] to continue producing more dry gas domestically for the electricity sector," Baker told NGI Monday.
Spain's Union Fenosa SA, that nation's third-largest electric utility, and Japan's Mitsui & Co. and Mitsubishi Corp. have been identified as the three principal companies seeking to build the Manzanillo terminal. Sources in Mexico City have speculated that Mitsu might have the inside track; however, it appears that CFE's concerns about the terminal size will delay a selection for awhile.
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