MEXICO CITY – Mexico’s oil regulator has approved a revamped plan for development of the once-abandoned Lakach deepwater natural gas project, presented by state oil company Pemex, in the first public session chaired by its newly appointed head.
Officials at the National Hydrocarbons Commission (CNH) raised questions during the session about whether Pemex could shoulder the massive venture that was abandoned once before. Under Lopez Obrador, Pemex proposed to revive the project along with US liquefied natural gas company New Fortress Energy Inc.
“This is a huge investment, but also a huge uncertainty,” said Alma America Porres, one of the CNH officials. “It’s very important that we supervise this (project) very strictly, much more so than others,” Porres was quoted as saying by Reuters.
Ultimately, all CNH officials gave the green light for Lakach, after Pemex modified its original plan. Initially estimated to cost $1.5 billion, the regulator approved the new plan at $1.79 billion. Mexican laws stipulate that regulatory approval requires projects be both technically and economically viable.
Pemex had proposed to develop Lakach with New Fortress Energy using a service contract, a formula used prior to the nation's energy sector opening in 2013-14. Under a service contract, Pemex would retain full ownership but bear the risk if prices fall.
The regulator did not address the details of the contract with New Fortress Energy in its session.