Pemex exploring compressed gas supply to Cuba

Pemex exploring compressed gas supply to Cuba
20 Jan 2016, 5.24 pm GMT

Mexico City, 20 January (Argus) — Mexico is throwing its hat into the
ring to supply natural gas to Cuba in the wake of Washington´s
rapprochement with Havana.

Mexico's economy secretary Ildefonso Guajardo raised the possibility of
state-run Pemex supplying Cuba during a Mexican conference last week.
"It´s something we´re just starting to explore," he said.

In 2012, Mexico and Cuba signed a series of cooperation agreements,
including the sharing of expertise, technology, best practices, training
and renewable energy know-how.

The gas talks started during a visit to Mexico in November 2015 by
Cuba's president Raul Castro.

Mexico has been importing growing volumes of shale gas from the
neighboring US though an expanding network of pipelines. But Guajardo
said the gas for Cuba would not necessarily come from the US.

Mexico is in the throes of opening its energy sector, a ground-breaking
process that is expected to boost Mexico´s own domestic production as well.

Cuba is seeking to purchase gas "from several sources, including
Mexico," to supply power plants to be developed "over the next three to
four years," an official of the island's state-run oil company Cupet
tells Argus. "The discussions are not yet at a stage where we can state
actual volumes, but we know we will need the fuel for the power plants."

The discussions with Mexico are "in their early stages" and similar
discussions are planned with other possible sources, the Cupet official
said.

Major LNG exporter Qatar said in November 2015 it will invest $2bn over
the next five years in a number of projects in Cuba, including some in
the energy sector.

A number of small LNG projects in the US, which is just emerging as an
LNG exporter, are also eyeing the wider Caribbean market where
subsidized Venezuelan oil supply is seen as unsustainable.

Compressed gas could be a more viable near-term option for Cuba than LNG
because it does not require as much import terminal infrastructure.

Cuba´s economy is expected to begin recovering slowly as the US eases
some economic and political restrictions, even though an economic
embargo remains in place and can only be lifted by the US congress. The
US and Cuba restored diplomatic relations last year.

Cuba's state-run power utility UNE and Russian state-owned power company
Inter Rao are developing 800MW of thermal generating capacity, the
companies said in October 2015.

Cuba´s $1.6bn power development project involves three 200MW plants at
the East Havana complex in the capital Havana, and a 200MW unit at the
Máximo Gomez complex in Mariel, 40km west of Havana.

Construction is scheduled to start by March, and a date for
commissioning will be set once construction starts, the Cupet official
said. "Our current gas production is inadequate to meet the needs of the
power plants."

Cuba produces around 50,000 b/d of liquids and 20,000 b/d equivalent of
gas from onshore and shallow water reservoirs. The island imports around
80,000 b/d of oil from Venezuela on preferential terms.

The domestic gas is used for power generation by the Energas consortium
that is jointly owned by UNE, Cupet and Canada's Sherritt International.

Energas has 506MW of Cuba's total operational generating capacity that
UNE puts at 3,680MW.

Sherritt is the only foreign investor in Cuba's power sector.

Cuba hopes to restart a stalled search for oil and gas in its waters in
the Gulf of Mexico, Cupet said in 2015.

Source: News - Argus Media -
https://www.argusmedia.com/News/Article/?id=1172705