Shell Gas & Power and El Paso Global LNG will develop an LNG re-gasification terminal in Altamira, Tamaulipas State on Mexico’s East Coast. Shell and El Paso will each hold a 50% interest in the project. The companies have already acquired rights to sufficient land at the Altamira port and are advancing design of the facilities. By jointly developing the re-gasification terminal, Shell and El Paso will be able to achieve economies of scale and pool resources thereby enhancing the speed with which the project can be progressed. The re-gasification terminal will target fast growing gas demand in NE Mexico, which is largely driven by electric power demand growth. Overall Mexican gas demand is growing strongly and LNG supplies will complement domestic gas production to meet this growth. The re-gasification terminal will have an initial capacity sufficient to meet demand in the immediate region of Altamira, with the potential to expand up to 1.3 billion cubic feet of gas per day (10 million tons of LNG per annum). Initial investment costs are estimated to be up to approximately USD 300 million, and the re-gasification terminal is expected to start importation of LNG in the first half of 2004. The project will market gas directly to Pemex, the Mexican state energy company, industrial users and power producers.
