Mexico Seeks To Lure LNG Projects

Struggling to meet a growing deficit in its natural gas supplies, Mexico is hoping that regulatory changes will lure new liquefied natural gas (LNG) projects by as early as September. Mexican government officials and interested companies discussed regulatory changes for new LNG terminals, which would help meet gas demands growing at a 10 percent clip annually, the ministry said. The move comes as Mexico fights to keep up with growing needs for the clean-burning fuel from both consumers and gas-fired power generators. Although Mexico has vast reserves of natural gas, the largely state-run industry has failed to invest in the fields to bring them on line for production. As a result, Mexico has been forced to rely increasingly on natural gas imports, which come largely via pipeline from the United States. LNG import terminals, meanwhile, would enable Mexico to bring in gas from far-off suppliers, since LNG -- a highly compressed, super-cold form -- can be transported in tankers much like crude oil. The plans also come as one LNG project already appears to be in the works. In late June, Royal Dutch/Shell Group and El Paso Corp. said they plan to build an LNG terminal at Altamira on Mexico's east coast. The two energy companies said investment costs would run about $300 million each for the plant, which could eventually have a capacity of 1.3 billion cubic feet per day (cfd). The project still needs the approval of the Mexican government. - (Reuters)