Shell to Build New LNG Terminal in Mexico

Shell announced its intention to develop a new liquefied natural gas (LNG) regasification terminal in Baja California, on the West Coast of Mexico. Shell has contracted the supply of initially 7.5 million tons per annum of LNG, to be sourced from projects in the Asia-Pacific region.

The terminal will have a send-out capacity of up to 1.3 billion cubic feet per day and is expected to come onstream in 2006. Associated investment costs are estimated to be approximately $500 million. Shell intends to market gas to power plants and other potential customers in Baja California, and to sell surplus gas into the Southern Californian market.

Shell Gas & Power Director Jon Chadwick, who met with the Baja California Governor Eugenio Elorduy Walther yesterday, said: "The development is significant in that it furnishes a supply of LNG to the new terminal, providing Mexico a new supply of gas to meet the growing energy demands of North West Mexico, whilst providing an outlet to market the surplus gas to the United States."

Peter Kidd, Shell Mexico's Country Chairman said: "We are delighted to be working with Mexico to realise this important project, which will help stimulate the country's economy by providing a reliable and clean supply of natural gas. It is good news for Mexico and good news for the people of Baja, who will reap the environmental rewards of access to cleaner energy. " Shell proposes to locate the terminal in Costa Azul, in the municipality of Ensenada. The company will be holding comprehensive consultations with local communities and relevant authorities on the environmental and social impact of the planned development.