Shell to Seek Partners for up to 50% of Altamira LNG Project

Oil multinational Shell will seek partners for up to 50% of a liquefied natural gas (LNG) project it could develop at Altamira on Mexico's Atlantic coast, Shell Mexico gas and power manager Cornelis Van der Bom told BNamericas.

Mexico's state power company CFE is calling for bids for the supply of natural gas at Altamira to enable it to meet supply commitments to the Altamira V, Tuxpan V and Tamazunchale combined cycle power plants.

Shell initially teamed up with US energy company El Paso in a 50:50 partnership to compete for the 15-year CFE concession, but El Paso subsequently pulled out as part of a company-wide decision to withdraw from the LNG business. Shell now has 100% of the project, but "we do not envisage having a 100% terminal in the long term," Van der Bom said. "In principle we'd look for a partner in up to 50% in the project. We could potentially see partners take less than 50%, and to be meaningful I'd say that a minimum amount would be 25%," he added. With regards to LNG supplies, Nigeria is a "primary possibility" while "in the longer term and at the back of my mind is Venezuela," Van der Bom continued.

Altamira is one of two LNG regasification projects Shell is pursuing in Mexico; the other is at Costa Azul on the Pacific coast in Baja California state. Environment authority Semarnat gave its approval for the US$600mn project last week and Shell is now waiting for energy regulator CRE and the local municipality to give their respective approvals, and expects to make an investment decision on the project in the third quarter this year, Van der Bom said.

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