Mexico to import 2.83Mm3/d LNG to guarantee supply

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Thursday, March 7, 2013

Starting late March, Mexico will import a total 100Mf3/d (2.83Mm3/d) LNG via the Manzanillo and Altamira terminals for approximately one year to guarantee natural gas supply to the country, Alejandro Martínez Sibaja, director of state oil company Pemex's gas subsidiary PGPB said at the BNamericas Mexico Energy Summit in Mexico City.

Martínez said LNG imports will cost some US$20/MBTU compared to the current Henry Hub price of US$3.53/MBTU.

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Natural gas supply has been an ongoing issue in Mexico over the past year as local pipeline infrastructure struggles to keep up with increasing demand triggered by consistently low prices in the US.

Martínez said the imports will continue until two new gas compression stations - Altamira and Soto La Marina - come online in mid-2014. The new facilities will up import capacity from the US by 500-600Mf3/d, he added.

As BNamericas reported, the tender for the Soto La Marina station is schooled for launch on March 7.

By 2016, when the Los Ramones pipeline system, with 1Bf3/d capacity, and the northwest pipeline system come online, Mexico's natural gas worries will be over, he said.

Natural gas critical alerts caused by insufficient supply left many in Mexico angry at the federal government and public energy companies for failure to plan energy infrastructure. Industrial federation Concamin said each critical alert was costing industries US$100mn-150mn.

However, Concamin is satisfied with solution reached by the government bodies, Giovanni Aloi Timeus told BNamericas on the sidelines of the summit.

"Today there is a different consciousness. I have no doubt that by the end of March natural gas conditions will be normal and will keep improving until we have infrastructure exceeding necessity."