Lloyds List: Mitsui takes stake in Altamira LNG project: “LEADING Japanese trading house Mitsui ' Co is acquiring a 25% stake in Shell's Altamira liquefied natural gas terminal project on the east coast of Mexico.” (ShellNews.net)

Tony Gray

Nov 03, 2004

LEADING Japanese trading house Mitsui ' Co is acquiring a 25% stake in Shell's Altamira liquefied natural gas terminal project on the east coast of Mexico.

The deal, which is subject only to the approval of the Mexican authorities, will reduce Shell's stake to 50%, with France's Total holding the remaining 25%.

All the terminal regasification capacity continues to be contracted to a separate marketing company owned by Shell (75%) and Total (25%).

The terminal will comprise two LNG storage tanks of 150,000 cu m and be able to accommodate ships of up to 200,000 cu m. The initial send-out capacity of the terminal will be 0.5 bn cu ft per day (3.6m tonnes a year).

Construction began last year and the terminal is expected to start operations in the fourth quarter of 2006.

Comision Federal de Electricidad (CFE) has awarded the Altamira marketing company a contract to supply 5bn cu m of gas a year (3.6m tonnes a year) for 15 years starting in October, 2006.

Shell has not specified from where the gas will be sourced but has a wide portfolio of options.

The oil major is the largest supplier of equity LNG globally, and its projects include Nigeria LNG, Oman LNG, North West Shelf (Australia), Malaysia LNG, Brunei LNG and Sakhalin. 

The Altamira project is expected to be the first new LNG regasification terminal built in North America for more than 20 years.

Depending on gas demand growth in northeast Mexico, Shell said the terminal could be expanded to 10m tonnes a year.

The Japanese publication Nihon Keizai Shimbun reported that Mitsui was paying $100m for the Altamira stake, but Shell would not confirm whether this was accurate.

Shell explained that the sale of a 25% interest in the terminal reinforced its strategy of focusing on LNG supply, capacity rights and access to markets.

It follows closely on the recent signing of a 20-year agreement by Shell to take half of the initial capacity in Sempra Energy's planned LNG regasification terminal in Baja California, Mexico.

Catherine Tanna, Shell Gas ' Power director, Americas and Africa, said the Mitsui deal confirmed 'the confidence of a major foreign investor in the fundamentals of the Mexican energy market.'

Mitsui said the Altamira stake was in line with the group's strategy of increased investment in strategic energy supply chain infrastructure.

This would build on its successful tender earlier this year for development of an independent power project in Mexico.

Michio Matsuda, Mitsui's executive managing officer, said that the Japanese group shared Shell's view about the potential of Mexico's natural gas market.

This included its need for more natural gas infrastructure.