Mexico Slaps Force Majeure on Hurricane-Hit LNG Terminal - Maritime Executive

Posted - September 23, 2013 - Maritime Executive (Reuters)

Mexican state power utility CFE said on Monday it had declared force majeure late last week on imports into the Manzanillo liquefied natural gas (LNG) terminal after Hurricane Manuel damaged a pipeline.

The line in question, the Guadalajara Pipeline, is owned by pipeline company TransCanada Corp and transports natural gas in a gaseous state to the terminal at Manzanillo.

"The force majeure derived from ... a possible break in the pipeline involving a natural gas leak due to heavy rains and flooding," CFE said in a statement.

CFE said at least one LNG cargo scheduled to arrive at the terminal on Sept. 21 had been delayed.

TransCanada Corp said service to its natural gas customers, both CFE and state oil and gas monopoly Pemex, on that section of the pipeline had been temporarily suspended.

"A pipe linking the terminal to the gas grid was damaged by Hurricane Manuel ... it has affected the unloading date of cargoes," a source with knowledge of the matter told Reuters.

Further cargo deliveries into the terminal may be delayed by at least one week, the source said, adding that the pipeline issue should be resolved in that time.

Mexico imports LNG at its Pacific coast Manzanillo terminal and the Gulf coast Altamira terminal to augment Mexico's strapped natural gas supplies.

"It appears to be a line break," Michael Barnes, a spokesman for TransCanada said in an email, adding that the company hoped to return the pipeline to service "as soon as possible."

"We are in the process of determining the issue and the steps necessary to correct it," he said, noting that the company has crews on the scene.

The natural gas that is not consumed for CFE's LNG operations at the Manzanillo terminal is transported to state oil company Pemex, said Barnes.

Barnes said that the damage posed no danger to the surrounding communities.

The damaged section of the TransCanada pipeline is located near the town of El Bordo, about 125 km (80 miles) inland from the port of Manzanillo, in Colima state.

The Manzanillo LNG terminal, with a capacity of 3.8 million tons a year, started operations last year, and is a owned jointly by Samsung C&T, Mitsui Trading, and Korea Gas Corp, the world's biggest LNG buyer.

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