Australia, Mexico to sign energy pact in November

SYDNEY: Australia and Mexico will forge an energy co-operation agreement in November, the energy minister of Australia, which wants to sell more coal and gas to the Latin American country, said yesterday.

The two nations had hoped to sign a memorandum of understanding during an international meeting of energy officials in Sydney this week.

However, Mexico's energy secretary Fernando Elizondo was forced to cancel his visit. The pact is now scheduled to be signed in November, said Australian energy minister, Ian Macfarlane.

"It's a memorandum of understanding covering technology exchange, issues relating to LNG terminals in Mexico, particularly Baja California, and I assume it will also contain issues relating to greenhouse gas," Ian Macfarlane told reporters on the sidelines of the meeting.

Australia is the world's largest coal exporter, bringing in $A11.9 billion in export revenue in fiscal 2002-2003. It also exports millions of tonnes of liquefied natural gas annually, mostly to Asia.

Macfarlane said the pact would not include supply deals, though the two countries had earlier this year held preliminary discussions over supply contracts.

Australia is keen to tap the growing market on the US West Coast, where several LNG receiving terminals have been proposed, but face tough environmental hurdles before being approved.

It has also been pitching its gas to Mexico where four terminals are planned by 2008.

US oil major ChevronTexaco Corp. aimed to build a $US650 million offshore LNG terminal in northern Mexico's Baja California by 2008, to accept gas from the $A11 billion Gorgon gas field off the Australian west coast.

Macfarlane said Australia also hoped to sell LNG to Canada, where construction of at least eight receiving terminals was being considered.

Canada's deputy energy minister George Anderson earlier told the gathering at least five terminals had been proposed in eastern Canada and three off the western coast.

Algerian Oil Minister Chakib Khelil told the meeting his country was seeking to market LNG to the US West Coast.

". . .the market in the US will develop. . . maybe through Mexico and Canada more than via new sites in the US West Coast," Khelil said.

Algerian state oil and gas producer Sonatrach is the world's second largest exporter of LNG.

All of Australia's LNG is produced by the North West Shelf Joint Venture, operated by Woodside Petroleum Ltd.