CFE: Altamira LNG Terminal Construction 82% Complete

Construction of Anglo-Dutch firm Shell's Altamira liquefied natural gas (LNG) regasification project in Mexico's Tamaulipas state is 82% complete and will receive its first LNG shipment in the next four months, Mexican state power company CFE director Alfredo Elías told reporters at a press conference on Tuesday.

Shell had said it would start to supply LNG to Altamira from September 30, 2006, according to a previous BNamericas report.

The project is considered important to supply gas for CFE's power generation in northeastern Mexico in the next few years as natural gas imports from the US will not cover increasing demand for the fuel in the Gulf of Mexico and the country's central regions, Elias said.

CFE expects to save US$5mn a year by buying gas from Altamira rather than from state oil firm Pemex, CFE financed investment projects director Eugenio Laris has said.

The CFE will pay Shell (NYSE: RDS) the Henry Hub LNG index price plus US$0.36 per million British Thermal Units (MBTU) for the gas.

CFE signed a 15-year LNG supply contract with Shell to be the sole offtaker from Altamira in October 2003, allowing CFE to supply 500 million cubic feet a day of gas to its Altamira, Tuxpan and Tamazunchale power plants on the Gulf of Mexico coast.

Shell is responsible for supplying 75% of the LNG and France's Total (NYSE: TOT) will supply the remaining 25%. Shell holds a 50% interest in the terminal, Total 25% and Japanese company Mitsui 25%.

Most of the LNG supplied by Shell will come from Nigeria and the rest will be sourced out of Shell's LNG portfolio in the Atlantic Basin including Trinidad & Tobago.

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