Koreans complete LNG project 2 months early

July heralds the completion of the storage tanks and the regasification facility being built in Manzanillo.

Liquefied Natural Gas, or LNG, will be transported by ships from Peru to the new port. From the port terminal, it will be regasified, and will go by pipeline to Guadalajara. From Guadalajara, it will be moved by pipeline all over Mexico. Mexico currently uses Liquefied Petroleum Gas (LPG) or propane for heating and cooking.

Gas carriers are ships that are specially designed to transport gas. This ship type is considered to be more technically advanced than Bulkers and Tankers. Most ships of this type are built at yards in Korea or Japan as they have the experience and proven track record.

Oil price and the recent environmental debate has increased demand for LNG. Not only as source of energy for land based installation but also as fuel for ships due its environmental advantages.

According to Jesus Castle Pérez, director of the project, more than $770 million dollars has been invested in this venture, which took 3 years to complete. Pérez also stated that the construction has generated 3,000 direct jobs, 70% of which went to people who live in Manzanillo. He added that the project was finished on time, and now waits for the arrival of the first ship.

Pollution from Manzanillo's power plant will soon be at an end.

The conversion of Manzanillo's power plant to natural gas will reduce the contamination level. The plant currently burns combustóleo in the production of electric power, which is then sold to other states in Mexico. The conversion from combustoleo to LNG is 98% complete. President Calderon will be in Manzanillo in October 2011 to dedicate the opening of the converted power plant.

With the new LNG regasification facility complete, unofficial sources say the first LNG carrier will arrive Nov. 2, 2011.

The regasification plant will supply power to CFE facilities throughout the western parts of Mexico, and to the city of Guadalajara.

In 2007, CFE awarded a USD 15 billion contract to the Spanish oil and gas company Repsol YPF. The 15-year contract calls for a total volume of gas supplied will be more than 67 billion cubic meters (2.336 trillion cubic feet).

The gas will come from the Camisea liquefaction plant in southern Peru, of which Repsol is the exclusive trader, with 20% ownership.

The other partners of Peru LNG are Hunt Oil Company of Tyler, Texas (50%), SK Energy of Korea (20%), and Marubeni, of Tokyo, Japan (10%). The Camisea consortium, in which Repsol also has a 10% stake, supplies natural gas to this plant.

Manzanillo will be Mexico's third LNG terminal, after Altamira, in the Mexican Gulf, and Costa Azul, in Baja California.

Read more about the LNG process, from start to finish. More about the Camisea project.

LNG Storage tanks under construction