Govts Discuss LNG Exports from 2010, Price to be Key Factor

Mexico and Peru plan to sign an energy cooperation agreement later this month which could include Mexican purchases of Peruvian liquefied natural gas (LNG) from 2010, Peru's energy and mines ministry said in a statement.

However, Mexico could bypass Peru altogether if Australia, Russia or Bolivia can offer cheaper gas, Reuters quoted Mexico's energy minister Fernando Canales as saying in Lima on Friday.

Canales said Mexico would decide in an auction in May where the country would buy LNG from for its Manzanillo regasification project on the Pacific coast.

"Like any business transaction, we're looking for the best price. The market price is only a reference point," Reuters quoted Canales as saying.

Peru has proposed exporting LNG to Mexico from its Camisea gas fields in a project known as Camisea II under development by a consortium led by US oil company Hunt Oil.

The Mexican delegation led by Canales met with Peru's energy minister Glodomiro Sanchez Mejia and other Peruvian government officials last Friday as part of a visit to Bolivia and Peru to negotiate LNG purchases at competitive prices and diversify Mexico's energy sources.

The Mexican delegation also expressed interest in participating in Peruvian state oil company Petroperu's refinery modernization project, the statement said.

Canales said Mexico's state oil company Pemex could explore for oil and gas in Peru to meet Mexico's growing energy demand and could work with other companies to explore for hydrocarbons, Reuters reported.

Mexico's energy ministry has not yet made any official statement about Canales' trip to Bolivia and Peru.

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