CFE to call for bids on Manzanillo LNG supplies by Aug

Mexico's state power company CFE will launch an international tender to supply 500 million cubic feet a day (Mf3/d) of liquefied natural gas (LNG) to a proposed re-gasification terminal at the port of Manzanillo on the Pacific coast in July or August, a CFE official told BNamericas. The contract will be for a minimum of 15 years, said the official, CFE project finance department deputy development director Alberto Ramos. "Right now we are finishing up authorizations with the energy and finance secretaries," he said, adding the Manzanillo site in Colima state has already received environmental and concession licenses. CFE plans to sign the LNG supply contract by January 2006. CFE is considering adding a second stage to the project for an additional 500Mf3/d of LNG, but this decision will not be made until 2007-2008, Ramos said. The gas will mainly be used to meet demand at new power projects planned by the CFE to come online after 2010. Ramos declined to specify the number of projects on the drawing board but said that 2,200MW of new installed capacity is being planned "mainly" for Manzanilo and Jalisco states. Gas from the terminal will also be used to upgrade CFE's 1,800MW Manzanillo plant. "It uses a conventional technology now. We are going to upgrade the plant to be a combined cycle plant" and installed capacity will increase slightly, he said. LNG TERMINAL CFE will call for bids on a tender to build the re-gasification terminal in parallel to the LNG supply tender, according to Ramos. The LNG supply and the re-gasification terminal form "an integral project that will be carried out through several tenders," he said. Bids for the terminal will be received after the CFE has awarded the LNG supply contract. "There is certain information regarding the gas supply contract that is important to be considered when designing the terminal." The terminal will start operations at end-2009 and supply gas to new power plants coming online from 2010 and/or supply gas to existing plants in the coastal region, he said. The terminal will be able to supply enough gas to generate 3,500MW in the first phase. CFE is making the gas supply decisions in coordination with state oil company Pemex, he added. PERU LNG The Peru LNG consortium of US oil company Hunt Oil and South Korea's SK Corporation is reported to be in conversations with Mexican authorities regarding the gas supply tender. The Camisea upstream consortium has agreed to supply the Peru LNG consortium with 620 million cubic feet a day (Mf3/d) of gas for 18 years. Hunt Oil, SK Corporation, Algeria's Sonatrach and Argentina's Tecpetrol are members of the Camisea upstream consortium, which is led by Argentina's Pluspetrol. The Peru LNG consortium will buy gas and convert it into LNG at a terminal to be built at the Pampa Melchorita site. Local transport company TGP is also reported to be in discussions with the Peru LNG consortium regarding gas transportation from Camisea's block 56 to the liquefaction plant. The Peru LNG consortium is also reported to be in gas supply conversations with Chilean authorities for a proposed LNG re-gasification terminal being developed by state oil company Enap. The project, which is set to start operations by 2009, would be the first of its kind in South America.