Regional LNG: Mexico hopes LNG can meet surging gas demand
Thursday, June 26 2003 - 01:50 AM WIB
The country will have one of the highest growth rates in the world for gas demand. The Mexican government is already moving to get LNG terminals built.
Growth in gas demand will average 10.2 percent a year through 2011, reaching 9.9 billion cubic feet per day (BCFD) at the end of that period, Sergio Ramerez Lomelin, general director of the investment office of the Mexican Energy Ministry, told The CWC Group conference on the Mexican gas market, as reported by Dow Jones.
The greatest area of demand growth will be the electric power business, where gas demand growth is projected to average 10.5 percent a year through 2011, said Marcelo Parizot, manager of domestic gas sales for Pemex Gas y Petroquimica Basica.
Electric power demand will grow an average of 5.6 percent a year through 2011 to 290 trillion megawatt hours, said Ramerez.
The Mexican government has 10-12 companies interested in building LNG regassification terminals, but the first one won't open until 2007 at the earliest, said Dionisio Perez-Jacome Friscione, president of the Comision Reguladora de Energia, the Mexican national energy regulatory commission.
The CRE has already granted one permit for building a 1 BCFD plant in Tijuana in Baja California and is working on four other permit applications. Within the next two months, the CRE expects to grant permits for LNG terminals in Encinada, Altamira and two more in Baja California.
LNG supplies will come from sources such as Alaska, Russia, Indonesia, Malaysia or Australia, depending on the project.
According to various industry studies, LNG will be delivered to North America for $2.00-$3.70 per million British thermal units, said Michelle Michot Foss, executive director of the Institute for Energy, Law and Enterprise at the University of Houston. Those figures don't include profit or return on investment, she said.
As a result, $4 per million British thermal unit "is not an unreasonable target" for LNG in the U.S., she said. The real price, however, will be set by domestic supplies at the benchmark Henry Hub in south Louisiana. (*)