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Mexico's Sonora LNG Project Receives Three Permits

DKRW Energy LLC and a subsidiary of Houston-based El Paso Corp. received three environmental permits for their proposed joint venture liquefied natural gas (LNG) terminal and 1 Bcf/d pipeline facilities in Sonora, Mexico.

Permits obtained include environmental authorizations issued by the Mexican Federal Ministry of the Environment and Natural Resources (SEMARNAT) for the project's terminal and pipelines and a land-use permit for the terminal issued by SEMARNAT and the National Forest Commission.

"Securing these environmental permits demonstrates strong support from the local communities and the Mexican government, both local and federal, of the Sonora Terminal and Pipeline project and completes an important milestone for the project," said Steve Beasley, president of El Paso's Eastern Pipeline Group. "These LNG facilities, which will provide low-cost market access to natural gas markets in northwest Mexico and the southwest United States, will not only aid Sonora's economic growth, but will contribute favorably to the overall environmental balance in the region."

The Sonora Terminal and Pipeline project will include an LNG receipt, storage and regasification facility and a gas pipeline system that will provide gas to the State of Sonora as well as the southwestern United States. El Paso and DKRW are now working with UBS Securities LLC to identify potential suppliers.

Construction on the terminal, which will access Pacific Basin suppliers, could begin in 2008; however, the final schedule will be dictated by the needs of LNG shippers and clients, El Paso spokesman Richard Wheatley told NGI.

In 2004, El Paso and DKRW agreed to develop up to 350 miles of gas pipeline within Sonora by 2008 (see Daily GPI, Sept. 24, 2004). Land was secured for the LNG facilities in August of that year (see Daily GPI, Aug. 18, 2004) following an agreement for development with the Sonoran government (see Daily GPI, May 26, 2004).

Mexico's first LNG terminal received its first cargo in August (see Daily GPI, Aug. 18) and began commercial operations in October. Terminal de LNG de Altamira is a joint venture between Royal Dutch Shell plc (50%), Total and Mitsui (each 25%).

El Paso owns North America's largest gas pipeline system and is one of North America's largest independent gas producers. DKRW is a Houston-based clean energy development company.

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