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Peruvian LNG exports seen heading to Canada

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LIMA | Thu May 20, 2010 12:16am IST

LIMA May 19 (Reuters) - Concerns have risen over Peru's liquefied natural gas exports to Mexico after Repsol YPF (REP.MC), a minority project partner, said fuel would be initially shipped to Canada because a Mexican receiving plant is still being built.

Peru LNG, a consortium with lead manager U.S.-based Hunt Oil Co, is expected to have its LNG export facility ready as early as next month.

The consortium has a contract to send gas from its 4.5 million-tonne-per-year plant to Mexico. But a regasification plant in Manzanillo is not expected to be completed for another year.

Peruvian President Alan Garcia has faced sharp criticism over plans to export gas, which critics say could contribute to domestic shortages. Critics add there is nothing restricting companies from sending the fuel to Chile, Peru's neighbor.

Asked if Peruvian gas might end up heading to Chile, Peru's Energy Minister Pedro Sanchez said on Tuesday Repsol had sent the government a letter saying the gas would only be shipped to Mexico.

On Tuesday, a Repsol official said some gas would first head to Canada.

"Supplies will head to Canaport from Peru, either through a swap or through direct supplies, because Manzanillo is not completed yet," the Repsol official said.

Officials at Peru LNG in Lima and Hunt Oil in Texas were not available to comment on whether Peruvian LNG would be shipped to Canaport in New Brunswick, Canada. [nN18143124] (Reporting by Marco Aquino and Terry Wade; Additional reporting by Edward McAllister in New York; Editing by Sofina Mirza-Reid)

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