LNG Intelligence
Peru Slashes Mexican Exports

Friday, April 13, 2012

After a seven-month delay, Mexico's new LNG import terminal at Manzanillo finally looks set to open. A commissioning cargo arrived from Peru's Pampa Melchorita liquefaction facility on Mar. 19 aboard Valencia Knutsen, and state-run Korea Gas, which owns the 3.8 million ton per year import project with South Korea's Samsung C&T and Japan's Mitsui, says Manzanillo -- the country's third import terminal -- will be up and running next month (WGI Aug.10'11). But how much the new Pacific Coast facility will be used is open to question, given Mexico's plans to build more pipelines to bring in cheap US gas, and main LNG supplier Peru's desire to keep more gas at home.

Sources believe Manzanillo will see a modest amount of activity, at least in its first years of operation. "The pipeline system is not as well developed as they'd like, so in the meantime I think for this year at least LNG imports will be coming in to Manzanillo," says Javier Diaz, an analyst at US Bentek Energy. He adds that Mexican LNG imports have shot up 48% year-on-year since the start of 2012 as demand has increased much faster than new pipeline links to the US can be built.

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