Another signal that Mexico’s Pacific Coast will have a second liquefied natural gas (LNG) receiving terminal, perhaps by 2012, unfolded Monday in Mexico City where a Mexican federal electricity regulator said he expects at least three major international companies to bid on building a 500 MMcf/d LNG facility at Manzanillo, the nation’s busiest port located southwest of Mexico City. Bids are due Feb. 7.

Spain’s Union Fenosa SA, that nation’s third largest electric utility, and Japan’s Mitsui & Co. and Mitsubishi Corp. were reported to be the three companies seeking to build the terminal. George Baker, a Houston-based expert on energy issues in Mexico, told NGI that he thinks the project has realistic possibilities because Spain-based oil/gas giant Repsol already has a $15 billion contract with the Mexican government to supply LNG (see Daily GPI, Sept. 19, 2007).

The LNG supplies initially are mostly to help convert an older, oil-burning power plant in Manzanillo, a resort city in the state of Colima, and longer term much of the gas will be carried by a new Manzanillo-to-Guadalajara pipeline, serving growing industrial load along the route as well as in Guadalajara, which is about 100 miles to the north.

While the Mexican government wants to clean up the skies of Manzanillo to help encourage more tourism in a city that was once the pristine setting for the 1979 movie 10 with Bo Derek, there is a second driver for the plant, and that is getting more gas to fuel the industrial growth along a corridor that runs north to Guadalajara.

A pipeline to the north will also help fuel the infrastructure of Mexico’s federal electricity provider, Baker said. “And the idea also is to promote natural gas use by industry all along the way.” Repsol is part of an international consortium developing LNG supplies in Peru.

The project, which is expected to provide about 4.4 million metric tons of LNG annually to Mexico’s West Coast and possibly the United States, was approved early last year to proceed under the international group, including Hunt Oil and Korea’s SK Corp., along with Repsol (see Daily GPI, Jan. 23, 2007).

Under the terms of Repsol’s 15-year contract with Mexico, the Spanish energy company is supposed to begin supplying 90 MMcf/d in 2011, 180 MMcf/d in 2012, 360 MMcf/d in 2013, 400 MMcf/d in 2014 and 500 MMcf/d in 2015.

Although rich in oil/gas supplies, Mexico has long had to import gas because most of its gas production is reinjected into the ground to help produce the more profitable oil reserves.

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