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Mexico price spat pushes Peru LNG elsewhere

  • Märkte: Natural gas
  • 08.02.17

Mexico is issuing spot tenders for LNG after Shell stopped shipping Peruvian cargoes to the country because of a pricing disagreement.

Peru has been trying to adjust the terms of its supply contract with Mexico to take into account prevailing market conditions, but has run into resistance in Mexico.

Shell is supplying Mexico with US cargoes instead.

No Peruvian LNG has left for Mexico since 21 October last year. Peru exported 13 cargoes to Mexico's 3.8mn t/yr Manzanillo terminal in the equivalent period between late October to early February a year earlier.

Mexican utility CFE has issued tenders for at least nine cargoes during that period for LNG to be delivered to Manzanillo in October-February. New supply has come from the US, with 11 cargoes shipped from the 25mn t/yr Sabine Pass project to Mexico over the five months.

Shell is diverting Peru LNG cargoes to higher-priced markets. It has shipped 13 cargoes to Spain, two to Japan, two to South Korea, one to China, and one to the UK since the last cargo loaded for Mexico.

Spanish firm Repsol, at the time a Peru LNG stakeholder, signed a supply contract with Mexico's CFE in 2007 when the US Henry Hub natural gas benchmark was hovering at around $8/mn Btu. The price has since more than halved to $3-4/mn Btu.The deal covers around 3.2mn t/yr of LNG supply to CFE for 15 years, or to 2026. Shell took over the contract after it acquired most of Repsol's LNG assets in 2013.

Shell markets all of the supply from Peru's 4.4mn t/yr Pampa Melchorita terminal. It declined to comment on the status of the contract renegotiation between Peru and Mexico. Peru LNG is operated by Hunt (50pc) and includes SK (20pc), Shell (20pc) and Japan's Marubeni (10pc).


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