Oil and Gas

To get future LNG, Mexico may invest overseas - exec

HOUSTON, Oct 25 (Reuters) - Mexico has big plans for LNG as a fuel to generate electric power and in future may invest in production overseas to assure supply, a Mexican utility executive told an energy conference Thursday.

Comision Federal de Electridad (CFE) would need a change in Mexican law to invest in foreign gas wells and liquefaction plants but may need to do so to meet future power needs, Juan Granados Zuniga told Platts Mexican energy conference.

“In the future, CFE may go further up the value chain,” Granados Zuniga, CFE manager of project development, told the conference of plans for LNG.

Granados Zuniga afterward explained to Reuters that such moves are not on the immediate horizon but are part of CFE’s planning. “That’s in the long term,” he said. “Planning in Mexico takes a long time.”

The comments came as he told the conference of plans to meet growing need for electricity in Mexico, including construction of plants fired by coal and other fuels.

He noted demand for gas is expected to grow 3.9 percent a year through 2015 while domestic supply is only projected to grow 2.8 percent a year. That indicates that to expand gas-fired generation, LNG will be needed, he said.

“We have to guarantee there is enough fuel to produce it,” he said of electricity. “One way to do it is through the purchase, storage and regasification of LNG.”

CFE already has plans to build a terminal at Manzanillo to import and regasify liquefied natural gas for use in electricity generation. A supply contract is in place and operation is targeted for 2011.

CFE may build another LNG import terminal up the Pacific Coast at Topolobampo to begin operation in 2015 or 2016, he said.

A privately operated LNG terminal, owned by Shell RDSa.L, Total TOTF.PA and Mitsui 8031.T, began operation late last year at Altamira on the Mexican Gulf Coast. A second privately operated terminal owned by Sempra LNG SRE.N is nearing completion on the Pacific Coast south of Tijuana.

A third privately sponsored terminal is planned at Puerto Libertad on the west coast, on the Gulf of California, Granados Zuniga said.