Shell Receives CRE Approval for LNG Terminal in Mexico

Shell reports that the the proposed liquefied natural gas (LNG) re-gasification terminal in Baja California being developed by its affiliate, Terminal LNG de Baja California, S. de R.L. de C.V. has been awarded a gas storage permit by Mexico's Energy Regulatory Commission (CRE). The CRE permit provides the necessary federal approval to receive and store LNG at the proposed terminal and also to re-gasify the LNG for sale and delivery to customers and pipelines.

The CRE permit award follows on from the environmental permit that was granted to the Shell terminal project by SEMARNAT on 8th April 2003. The two permits together form a strong base for obtaining the remaining permits required for the development of the terminal and the proposed associated gas pipeline.

Peter Kidd, Shell's Country Chairman in Mexico said: "We are delighted to have our permit application approved by the CRE. It is a significant milestone for the terminal project and establishes us well on the way to realizing our development plans. In providing a reliable and clean supply of natural gas, this project has an important role to play in the growth and development of Baja's economy. In that process, we remain committed to our program of engagement with all of our stakeholders, including the local communities within Baja."

The proposed terminal, to be located in Costa Azul, 23 km north of the city of Ensenada on the west coast of Mexico, will have a capacity of 7.5 million tons per annum (equivalent to 1000 million standard cubic feet of gas a day) and is expected to begin operations in 2007.

Shell is looking at several sources of LNG supply to the terminal, from a number of potential sources in the Asia-Pacific basin. The re-gasified LNG would be transported through a new gas pipeline to link up with the existing gas infrastructure in the north of Baja California. Gas would be marketed to power plants, industrial customers and major utilities in the north west of Mexico and southern California, USA.