Mexico, Colombia, Dominica, Centam reach joint energy agreement

CANCUN, Mexico, Dec. 13 (Xinhua) -- Mexico, Colombia and the Dominican Republic signed the Cancun Declaration on Tuesday, agreeing to promote the Mesoamerican energy integration program proposed by Mexico.

Presidents and representatives from the three countries and all Central American nations attended the meeting hosted by Mexican President Vicente Fox on Tuesday in Cancun, Mexico.

The declaration calls for the construction of a refinery, a plant for liquefied natural gas, a hydroelectric dam and a gas pipeline stretching from Mexico to Panama.

"This new, vital and strategic initiative will make our economies competitive and bring benefits to our people," Fox said at the summit.

"It will allow us to grant our nations certainty in energy supply, to reduce dependency (on imports) and to develop new industries associated with energy supply," he added.

The declaration also orders a ministerial committee to take charge of the feasibility studies on the whole program and a regional regulatory commission to set standardized rules and regulations for the distribution of oil, natural gas and electricity throughout Central America.

Mexico will supply crude oil for the refinery that will be built in Central America, which is part of a sweeping energy integration plan. The participants agreed that a firm chosen by the Inter- American Development Bank will decide on the final site for the refinery.

It was also agreed at the summit that Mexico will link its power grids to the countries to the south as part of a connection that will stretch to Colombia in the future. Mexico has already started working on the power grid linking Guatemala.

Besides, the program also includes a power plant to run on coke produced by the refinery, which is subject to the feasibility studies as well. Meanwhile, a gas pipeline linking Mexico, Colombia and Central America will be laid, so that the two countries will be able to pipe natural gas to their southern neighbors.

Mexican Foreign Secretary Luis Ernesto Derbez said on Monday that the total energy initiative would amount to 7 billion to 9 billion US dollars. The refinery, with a processing capacity of 230,000 barrels of crude oil per day, will cost 3 billion dollars, while the cost of laying the gas pipelines will exceed 2 billion dollars.

The representatives promised to hold another summit next year in the Dominican Republic, for the sake of officially carrying out the agreement.

As for the fund for the program, the declaration states that the refinery and power plant will be financed by the private sector, while governments in the region are allowed to contribute as shareholders.