DKRW Plans 1.3bcf/d LNG Plant in Sonora, Mexico

Sonora Pacific LNG, a subsidiary of Houston-based development company DKRW Energy, has signed an agreement with Mexico's Sonora state government to build a 1.3 billion cubic feet a day liquefied natural gas (LNG) regasification terminal at Puerto Libertad on the Sonora coast, the company said in a statement Tuesday.

The project includes the terminal, two 160,000 cubic meter storage terminals at Puerto Libertad, gas pipeline infrastructure in Sonora, possibly extending to the neighboring Sinaloa state, and a 36-inch export pipeline through Nogales to interconnect with the El Paso Pipeline system east of Tucson.

DKRW started looking into LNG opportunities about 18 months ago and became "very focused" on the Sonora project in January this year, DKRW spokesperson Lisa Marshall told BNamericas.

"Sonora is focused on growing based on industrial development, and right now one of the hindrances to that growth is it does do not have enough gas supply. This opens it up to opportunities for gas from all over the world at international prices, which is a wonderful thing to pass on to the industries trying to locate in Sonora", she said.

Sonora state itself would use 500 million cubic feet a day (mcf/d) of gas and 800mcf/d would be piped through to the US, the statement said. Sinaloa consumption is as yet undetermined.

Marshall declined to comment on project costs. DKRW could seek partnerships. "There is a lot of gas looking for a home, particularly in the Pacific and southern Asia, so anybody with a lot of gas supply would be a potential partner," Marshall said.

"It depends on the opportunities that present themselves." Construction is set to begin in mid-2005 and operations are projected for mid-2008, which Marshall described as a tight but manageable schedule.

US engineering companies Bechtel and CBI will undertake engineering and construction, El Paso Pipeline has been hired for infrastructure and interconnections, Universal Energy is the owner's engineer and Andrews Kurth LLP is the legal advisor.

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