With natural gas expected to become Mexico’s fuel of choice by 2011, a Mexican government official revealed that operating licenses could be issued within the next few weeks for as many as two of five liquefied natural gas (LNG) terminals now on the table.

Mexico, which is facing a 1.6 Bcf/d shortfall between gas demand and supply, has to have LNG for the country to grow, said Dr. Alejandro Brena, who spoke at a Houston conference last week. Brena directs the natural gas division of the Comision Reguladora de Energia (CRE), Mexico’s counterpart to the Federal Energy Regulatory Commission. Most of Mexico’s gas growth is expected in Mexico City, but Brena said a shortfall also is seen in the northeastern part of the country and the growing southern region.

Brena did not specify which projects likely would receive the next licenses to build, however, five are now being reviewed by CRE. The companies whose terminals are approved for operation have indicated they would obtain long-term contracts with customers by the date of commercial operation, Brena said.

Four LNG terminals are awaiting operating approval to build in Baja California Mexico and another is awaiting site approval in Altamira along the Gulf Coast, he said. Another bidding process is under way for a second LNG site in Altamira, said Brena, which would be overseen by the country’s electricity commission, the Comision Federal de Electricidad (CFE). Mexico also has asked for proposals for an LNG terminal at the port of Lazaro Cardenas, located on the Pacific Coast.

In May, the CRE granted Marathon Oil Corp. a permit to build and operate an LNG terminal near Tijuana, Baja California, which would include an LNG offloading terminal and 750 MMcf/d regasification plant, a 1,200 MW power plant, a 20 million gallon seawater desalinization plant and a wastewater treatment facility (see NGI, May 12). Marathon expects to have the complex in service by 2006.

Brena said the CRE is currently considering licenses for proposed sites by Sempra Energy at Costa Azul; a ChevronTexaco Tijuana site; and Royal Dutch/Shell’s proposals for terminals in Altamira and Costa Azul. In April, Sempra was granted the environmental permit for its proposed terminal, but needs the licensing permit before construction could begin (see NGI, April 21).

George Baker, an expert on Mexico’s energy and principal of the Houston-based consulting firm Baker & Associates, said in mid-July that Shell apparently has the inside track to build the Altamira facility, which would be a 425 MMcf/d receiving terminal (see NGI, July 21).

Going forward, Brena said Mexico will focus on three ways to increase its gas supply: upping exploration and production from its domestic resources; increasing pipe connections with the United States; and through additional LNG terminals.

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