Marathon Oil Corp. is apparently dropping plans to build a liquefied natural gas (LNG) terminal in Baja California after Mexican authorities took back the leases for the site the company was considering.

Marathon had received approval last May from the Comision Reguladora de Energia (CRE) for the Tijuana Regional Energy Center (see Daily GPI, May 9, 2003). The complex import terminal was to be built by Marathon and its joint development partners Grupo GGS SA de CV and Golar LNG Ltd. through their operating company Gas Natural Baja California.

The energy center was to 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.

Marathon spokesman Paul Weeditz told Reuters that “Marathon and its partners are surprised and disgusted by the local government’s decision to expropriate the land which we had an option to purchase.” He said, “It is obviously a sign that the government will not support the project, and as such it is clear that the Tijuana energy center will not be built,” he told Reuters. Marathon apparently does not have an alternative site for the energy center.

When the Mexican government approved the permit last year, it was the first of its kind accepted. However, additional permits were required, including Mexican federal environmental authority. Marathon had expected to have the complex in service in 2006.

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