Mexico woos companies on Manzanillo LNG project
Mon Mar 27, 2006 6:19 PM ET
yahoo.reuters.com
MEXICO CITY, March 27 (Reuters) - Mexico is talking to half a dozen companies ahead of opening tenders next month to build and supply a liquefied natural gas terminal at the Pacific port of Manzanillo, the CFE energy provider said on Monday.
The Federal Electricity Commission will open the tenders in the first half of April, after spending time discussing details of the LNG project with potential bidders, a spokesman said.
Analysts expect to see interest in the building tender from global LNG players like Chevron (CVX.N: Quote, Profile, Research), Repsol-YPF (REP.MC: Quote, Profile, Research), Sempra Energy (SRE.N: Quote, Profile, Research) and Royal Dutch Shell (RDSa.L: Quote, Profile, Research).
"Shell will review the CFE tender with interest, though we cannot confirm that we will participate until CFE issues the tender documents and we understand the terms and conditions on offer," a Shell spokeswoman in Mexico City said.
Sempra Energy is also "evaluating the opportunity," a San Diego-based spokesman said.
For a parallel tender to select suppliers of LNG for the $430 million, 500 million cubic feet per day plant, the CFE is talking to companies in gas-rich nations like Australia, Bolivia and Peru. Analysts see Peru's Camisea gas field well placed to win.
A third tender, to build a pipeline from the terminal to the national gas pipeline grid, will follow at a later date.
"This week we're holding final talks with the corporations that showed some interest, to clear any questions and doubts they had so we can add a final document that everyone's completely comfortable with," the CFE spokesman said.
"I'm sure that the Manzanillo bid will take place in the first fifteen days of April. There are around five or six companies interested (in the building tender)," he said, adding that the result of the supply tender should be announced first.
SHELL AHEAD, SEMPRA EXPANDING
Seen as a breakthrough for tight energy markets, LNG is natural gas supercooled to a liquid form so it can be easily shipped around the world from cheap suppliers.
The Manzanillo LNG import terminal and regasification plant, to be co-run by the energy ministry, the state-owned CFE and state energy monopoly Pemex, is one of a handful being built in Mexico to end a reliance on costly U.S. natural gas imports.
Shell is close to completing an LNG terminal at Altamira on Mexico's east coast with partners France's Total (TOTF.PA: Quote, Profile, Research) and Japan's Mitsui & Co. (8031.T: Quote, Profile, Research).
Sempra is a third of the way into building one at Ensenada, on the Pacific coast south of San Diego and recently said it was looking to expand the receipt terminal's storage and send-out capacity to 2.5 billion cubic feet per day from the 1 Bcfd initially planned.
The Manzanillo plant, due to be operational from 2010, will supply various power plants in the western state of Colima.
Some analysts have speculated the project could be delayed, however, due to disruption from Mexico's July election.
The CFE, which generates a third of its power from natural gas, sees electricity consumption in Mexico growing by an average of 5.2 percent per year between now and 2014.
© Reuters 2006. All Rights Reserved. |
