Regional LNG: Putin says Russian LNG supplies to Mexico may start in 2007

Supplies of Russian liquefied natural gas (LNG) to Mexico may start in 2007, Russian President Vladimir Putin told a joint press conference with Mexican President Vicente Fox late Monday, ITAR-TASS reported Tuesday.

In 2007 a major LNG plant is expected to be launched in Russia?s Far East, and the talks on gas supplies to Mexico and the U.S. are already underway, Putin said.

Meanwhile, Gennady Shmal, president of Russia?s Oil and Gas Industry Union, told ITAR-TASS that LNG supplies to Mexico could start as early as in 2005-2006 as part of the Sakhalin-2 offshore oil and gas project.

The capacity of the Sakhalin plant that is being built is 10 billion cubic meters of gas, but total supplies on long-term agreements do not exceed 40 percent of this figure, Shmal said.

?Mexico, which imports 30 percent of all gas consumed in the country from the U.S., is extremely interested in the project,? he said.

?Moreover, Mexicans are ready to attract Russian companies to build storage facilities, LNG refineries, and pipeline systems,? he added.

President Fox noted that Mexico would like to count on Russia?s help in the construction of gas processing facilities.

According to Putin, another promising sector for bilateral cooperation is oil production.

?Mexico uses only 18 percent of its capacity of oil production, therefore it is a very promising country for cooperation with Russia,? Putin said, reiterating that Mexico is an ?interesting partner? for Russia.

Putin is the first Russian leader to make an official visit to Mexico since the two countries established diplomatic relations in 1891. (*)