The ceremony to celebrate the completion and start of pilot operation of the Manzanillo LNG terminal was held at 12 p.m. on March 27 local time, at the facility’s site in Manzanillo, Mexico. Key participants of the project include Samsung C&T’s Trading & Investment Group (President & CEO Shin Kim) and the Korea Gas Corporation (KOGAS, CEO Gang-Soo Joo).
The ceremony was attended by Mexican President Felipe Calderon, Federal Electricity Commission Director Antonio Vivanco and other key members of the Mexican government, and Samsung C&T Senior Executive Vice President Jeong-Soo Kim, KOGAS LNG Terminal Head Hyun-Geun Shin, Korea Exim Bank Executive Director Young-whan Sul and other officials from the project’s stakeholders.
The Manzanillo LNG terminal project is a BOO (Build, Own, and Operate) project, for which the order was placed by the Mexico Federal Electricity Commission in 2008. The project consortium was formed by equity participation of 37.5% by Samsung C&T, 25% by KOGAS and 37.5% by Mitsui Trading, with the Korea Exim Bank providing the required US$500 million in project financing. According to the contract, the consortium is entitled to operate the terminal for 20 years after completion of construction.
The terminal will begin commercial operation in May. LNG gasified at the terminal will be supplied to the Manzanillo power plant, the Guadalajara independent power plant and neighboring cities.
The terminal is built on an 860,000ha site located in the city of Manzanillo in the state of Colima along the mid-western coast of Mexico. The terminal consists of: two 150,000㎘ storage tanks; an LNG gasification and delivery facility with an annual capacity of 3.8 million tons; and a jetty (port facility for ships to dock and unload LNG). The project is worth around US$900 million.
The most important stage of the project was the construction of LNG tanks for storing liquefied LNG (-162℃). Since the process requires advanced technology and precise process management, Samsung C&T entrusted tank construction to Samsung Engineering, which has much experience in plant projects in Mexico.
The significance of the project is found in two aspects: The first is that it is Korea’s first overseas LNG terminal investment and technology export project accomplished through collaboration between public and private corporations. The second is that it is the first project in which Korean companies own (combined 62.5% of shares) and operate an overseas LNG plant.
Samsung C&T possesses experience in LNG development and production as it is already participating in related projects in countries including Oman and Qatar. The construction and operation of the Manzanillo LNG terminal will provide the company with experience in LNG supplying and distribution, giving it a full grasp of all areas within the LNG sector. Using the accumulated experience and knowhow, the company hopes to expand its LNG-related businesses.