Shell Gas B.V. (Shell) and Mitsui & Co., Ltd (Mitsui) are pleased to announce that Mitsui will acquire a 25% equity participation in the LNG terminal in Altamira, Mexico, which is currently owned by Shell (75%) and Total (25%). The transaction is subject only to approval of the Mexican authorities. Upon completion of the transaction, the equity interests in the LNG terminal will be Shell 50%, Mitsui 25% and Total 25%.
All of the terminal regasification capacity continues to be contracted to a separate marketing company owned by Shell (75%) and Total (25%). Last year Comisión Federal de Electricidad (CFE) awarded this marketing company a contract to supply 5 billion cubic metres of regasified LNG per annum (equivalent to 3.6 million tonnes of LNG per year (mtpa)) for 15 years starting in October 2006.
The Shell led project will be the first new LNG regasification terminal built in North America for over 20 years and is expected to start operations in the fourth quarter of 2006. Depending on the growth in demand for natural gas in North East Mexico, the terminal could be expanded to 10 mtpa.
The divestment of 25% of Shell’s interest in this terminal reinforces Shell’s strategy to focus 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 at the LNG regasification terminal in Baja California, Mexico. At the same time, the purchase of the 25% stake in the Altamira terminal is in line with Mitsui’s strategy of increased investment in strategic energy supply chain infrastructure, building on its successful tender earlier this year for development of an independent power project in Mexico.
Catherine Tanna, Shell Gas & Power Director, Americas and Africa, said: “Shell is delighted that Mitsui has joined us in the Altamira project. This deal confirms the confidence of a major foreign investor in the fundamentals of the Mexican energy market. The agreement shows further delivery of our strategy to retain capacity rights in LNG projects around the world.”
Michio Matsuda, Mitsui & Co., Ltd., Executive Managing Officer, said: “Mitsui shares Shell’s view of the potential of Mexico’s natural gas market and its need for more natural gas infrastructure. Mitsui is pleased to expand our portfolio in the area of energy related infrastructure investment as well as our relationship with Shell through this first participation in an LNG terminal.”