With expectations that liquefied natural gas (LNG) will chosen to plug the hole in the United States’ natural gas supply deficit in the future, ChevronTexaco Corp. announced plans Thursday for an LNG receiving terminal in Mexico and an LNG shipping facility in Nigeria. The company also updated its progress on a receiving terminal to be located offshore Louisiana, where other top operators are aggressively trying to establish toeholds in the U.S. LNG marketplace (see Daily GPI, Oct. 30).

ChevronTexaco points to a recent National Petroleum Council study, which projects that LNG imports into North America would grow from 1.4 Bcf/d in 2003 to 8.5 Bcf/d by 2015.

To be located eight miles off the coast of Baja California Norte, ChevronTexaco’s Mexico project will consist of a $650 million offshore LNG receiving and regasification terminal. ChevronTexaco said it is currently working with Mexican authorities to secure permit approvals for the project.

The facility will be built as a freestanding concrete terminal — a Gravity Based Structure (GBS) — and will be designed to process 1,400 MMcf/d, with initial processing of 700 MMcf/d.

“Growing demand for natural gas in North America is widely projected to outstrip current supply capabilities,” said John Gass, president of ChevronTexaco Global Gas. “We believe ChevronTexaco’s proposed Baja California offshore LNG project will help fuel the development of a sustainable, future energy plan for Mexico and the United States and play an important part in meeting this demand.”

Upon receipt of all required approvals by Mexico’s federal, state and municipal authorities, the company said it anticipates beginning construction of the GBS in Baja California in 2004, with commercial operation projected for the fourth quarter of 2007. The Baja project is among several LNG terminals proposed for the peninsula (see Daily GPI, Oct. 9, Sept. 4, Aug. 20, May 9).

In August, ChevronTexaco teamed with the Gorgon Joint Venture, an offshore natural gas project in Australia of which ChevronTexaco is a partner, for the supply of 2 million tonnes of LNG annually for delivery to North America over a 20-year period.

On Thursday, the company also reported that it has teamed with the Nigerian National Petroleum Corp. (NNPC), ConocoPhillips and Eni to conduct the front end engineering and design (FEED) work for a new LNG supply facility to be constructed in Nigeria’s central Niger Delta.

The four partners have agreed to form an incorporated joint venture, to be known as Brass LNG Limited, to undertake the project. The move follows a positive viability study for the siting of an onshore LNG facility at the oil Brass Terminal operated by Nigerian Agip Oil Co. (NAOC).

The FEED will be for two trains, each nominally sized at 5 million metric tons per year. The companies said natural gas supplies for the facility will come from substantial gas reserves within oil and gas fields already operated by existing NAOC and ChevronTexaco joint ventures.

“This will be a world-class LNG facility and an important and strategic opportunity for the co-venturers to reduce gas flaring in Nigeria,” said Dr. J.E. Gaius-Obaseki, group managing director for the NNPC. “Furthermore, it will be an additional opportunity for Nigeria to monetize part of its vast natural gas reserves.”

The companies expect the FEED studies to be completed in 2004, with the facility targeted to be operational by the end of 2008. The primary market for the first train will be the United States, where average daily sales volumes from this project are estimated to be around 700 MMcf.

In addition to its operations in Baja California, the greater Gorgon-area in Australia and its Nigeria LNG project, ChevronTexaco’s global gas strategy also includes a proposed LNG project in Angola and a gas-to-liquids project through its Sasol Chevron joint venture. ChevronTexaco said additional LNG terminal projects also are under consideration for potential installation in California and offshore Louisiana.

Referred to as Port Pelican, the company has proposed an offshore regasification terminal for installation offshore Louisiana that also would be constructed using a GBS. That project is currently undergoing permit review by U.S. government authorities and a decision is anticipated before year’s end.

ChevronTexaco said it has awarded major contracts to Aker Kvaerner and Fluor for FEED and to perform engineering, procurement and construction management for its Port Pelican and Baja California offshore LNG terminals. The construction contract is expected to be awarded in the first half of 2004.

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