GLFE: .7991 to Participate in Proposed LNG Terminal
12/17/2007
HOUSTON, TEXAS, Dec 17, 2007 (Marketwire via COMTEX News Network) --
Gulf United Energy, Inc. (OTCBB:GLFE) is pleased to report that its 24 percent owned subsidiary Fermaca LNG de Cancun, S.A. de C.V., through its 50 percent owned interest in SIIT Energy, S.A. de C.V. has undertaken to participate in the development of a 300-500 MMCFD (million cubic feet per day) liquefied natural gas (LNG) terminal on Mexico's Yucatan Peninsula. The LNG project was contemplated in the Company's recently closed transaction with Cia. Mexicana de Gas Natural, S.A. de C.V. (MGN) establishing joint venture companies for this and the previously announced natural gas pipeline project, also on the Yucatan Peninsula.
The proposed terminal, with an estimated completion date of 2011, would make available a reliable source of natural gas for present and future power generation projects, as well as to the local market. Arcan Engineering, an independent consultant, has inspected the proposed LNG terminal site, concluding it to be a feasible location for the project. The preliminary engineering for the re-gasification facility has been completed and the necessary permits are under preparation as are extensive discussions with potential LNG supply sources. We continue to be encouraged by the relevant government authorities as they stress the importance of having infrastructure of this nature on the Yucatan Peninsula considering that Mexico is projected to be net importers of natural gas by 2015.
The cost to complete the project is estimated to be approximately US$500 million. A significant portion of the financing has been secured, with additional funds expected to come from a combination of equity and project based debt financing.
With regard to the previously announced natural gas pipeline project, Gulf United's 24 percent owned subsidiary, Fermaca Gas de Cancun, S.A. de C.V., through its 50 percent interest in Energia YAAX, S.A. de C.V., is continuing with project development and to that end the first of several permits, which MGN has been working on for over three years, were submitted to Semarnat (environmental authorities) for their review on September 5, 2007 and a request for additional information was received by MGN on November 16, 2007. The information requested has been submitted and approval is expected in early 2008.
Original plans called for the pipeline to be a 16 inch diameter, 234 km bi-directional line with a capacity to transport approximately 183 million cubic feet per day of gas. Based upon information received from the involved government authorities, engineering work is underway to increase the diameter of the line to accommodate up to 500 million cubic feet per day of gas. This change in diameter would allow the transport of gas from the existing Mayacan pipeline, owned by Gaz de France, thus meeting the demand of the industrial and power generation plants located in the cities of Valladolid, Cancun, and Nizuc until completion of the proposed LNG re-gasification facility. Upon completion of the re-gasification facility and the delivery of LNG, the pipeline would be able to transport gas to desired locations in the cities of Valladolid, Cancun, Nizuc, and Merida as well as being a net provider of gas back into the Mayacan pipeline.
As with the LNG terminal, financing for a significant portion of the estimated $US140 million project cost has been secured with the balance expected to come from a combination of equity and project based debt financing.
Additionally, Gulf United is evaluating potential oil and gas exploration projects both in the US and internationally as a part of its plan to develop an active upstream business unit. Discussions with potential financing sources are underway for both the infrastructure and exploration units.
Don Wilson, President of Gulf United, comments, "We continue to work with our Mexican partners to develop our Yucatan Peninsula projects. Both projects are very important to the future of the region and we expect them to provide Gulf United with a substantial asset base and meaningful cash flow in the future. We have been advised by the operator of the projects that a significant portion of the financing of each project has been secured. As each project continues to develop, we expect the incremental value of our interest to increase, thus being accretive to our investment. We continue to evaluate financing alternatives for our obligations on these projects going forward and are optimistic that such financing will be available as needed. We also are working hard in our evaluation of oil and gas exploration opportunities in the US and abroad in an effort to position the company in both active drilling programs and high-impact opportunities. We believe this strategy will enhance Gulf United's standing and afford us opportunities throughout the various sectors of the energy industry."
Safe harbor for Forward-Looking Statements: Except for statements of historical fact, the information presented herein constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the ability to acquire and develop specific projects and the ability to fund operations and other factors over which Gulf United Energy, Inc. has little or no control.
SOURCE: Gulf United Energy, Inc.
Gulf United Energy, Inc. Don Wilson President (713) 942-6575 (713) 583-6435 (FAX) Email: info@gulfunitedenergy.com Website: www.gulfunitedenergy.com
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