Daily Archives: December 11, 2011

GAIL to buy 3.5 million tonnes of LNG from U.S. firm

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by Sujay Mehdudia

“It will ensure long-term gas supply to meet demand in India

In a major step aimed at meeting India’s energy security requirements, state-run Gas Authority of India Limited (GAIL) on Sunday announced that it signed an agreement to buy 3.5 million tonnes a year of liquefied natural gas (LNG) for 20 years from a U.S. firm.

“GAIL has signed a sales and purchase agreement [SPA], for supply of LNG over 20 years, with Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Energy Partners, LP, the United States, for supply of 3.5 million tonnes per annum of LNG,” the company announced it in a statement here. The supplies may start as early as 2016.

“Under the SPA, GAIL will pay Sabine Liquefaction as per contractual provisions on a Henry Hub (U.S. gas benchmark) basis after transfer of custody on FOB. LNG will be loaded onto GAIL’s vessels,” the statement said.

The 20-year term would commence upon the date of first commercial delivery, and there was an extension option of up to 10 years. The LNG from Sabine Pass shall form a part of the basket for feeding LNG to Dabhol terminal in Maharashtra and Kochi in Kerala.

GAIL chairman and managing director B.C. Tripathi said: “The SPA with Cheniere will help GAIL to ensure long-term gas supply for the growing demand in the Indian market. This will be in addition to other initiatives being undertaken by GAIL, which includes building captive LNG facilities in India and augmenting its transmission capacity from 175 million standard cubic metres a day to over 300 msmcd over the next two years.”

“Charif Souki, chairman and CEO, said GAIL would join BG and Gas Natural Fenosa as the next foundation customer for our Sabine Pass liquefaction project,” he said.

GAIL is India’s leading natural gas company and its largest shareholder is the government of India.

“We are building a strong portfolio of customers, consisting of energy companies engaged in natural gas, LNG and power markets with operations spanning the globe. We continue to hold advanced discussions with additional global LNG buyers and expect to complete commercial discussions for the remaining capacity of the second phase of the project in the coming weeks,” he added.

The LNG would be supplied from four of the Sabine Pass LNG receiving terminal located on the Sabine Pass Channel in western Cameron Parish, Louisiana. The Sabine Pass LNG terminal project is being developed by Sabine Liquefaction and would include up to four liquefaction trains capable of producing up to 18 mtpa of LNG. The project is being developed in phases with each LNG train commencing operations approximately six to nine months after the previous train. Sabine Liquefaction recently announced that it had reached its targeted annual contract quantity of 7 mtpa for the first phase and was advancing towards making a final investment decision for the development and construction of the first two liquefaction trains.

“The SPA is subject to certain conditions precedent, including, but not limited to, Sabine Liquefaction receiving regulatory approvals, securing necessary financing arrangements and making a final investment decision to construct the second phase of the liquefaction project,” the statement said.

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Ukraine Postpones LNG Terminal Due to Funding Constraints

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Ukraine has postponed the construction of a liquefied natural gas terminal due to a lack of funding, Ukrainian newspaper Kommersant Ukraine has reported.

The project, undertaken by national gas company Naftogaz Ukrainy, is planned to be constructed on the Black Sea. However, due to a lack of investor interest, the project has been delayed, the paper reports a source from Naftogaz Ukrainy as saying. The country will now concentrate on a cheaper low-power floating regasification plant, the paper says.

The country is now considering the possibility of renting a floating terminal for regasification of the LNG until funding can be secured to built a terminal of its own.

“Today we see the mechanisms to use the offshore LNG-terminal,” chairman of the Ukrainian National Project LNG body, Vitaliy Demianiuk said. “The term of preparation of this project is about 2 years. It will be used until a ground terminal is built.”

Ukraine has turned to alternative sources of gas as part of an effort to diversify supply from Russian supplier Gazprom. Spanish Socoin, a gas engineering company, has recently been tasked with completing a feasibility study on the LNG terminal.

Source: Kommersant

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Mexico’s Drug Lords: Too Big to Fail?

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Written by  Alejandro Hope*

On the anniversary of the death of one of Mexico‘s most-wanted drug lords, analyst Alejandro Hope looks at the government’s strategy of taking down high-value targets, which many criticize as destabilizing the underworld and triggering more violence.

The following is InSight Crime’s translation of an article from Plato o Plomo, a blog by Alejandro Hope:

Friday marks the one-year anniversary of the death of Nazario Moreno, alias “El Chayo,” leader of the Familia Michoacana. With his demise, a spectacular cycle of captures and killings of cartel leaders was brought to a close. They fell one after another; in addition to Chayo, Arturo Beltran Leyva, Ignacio “Nacho” Coronel and Antonio Ezequiel Cardenas Guillen, alias “Tony Tormenta” all lost their lives in the space of 12 months. And this doesn’t include the captures of various lieutenants who were key players in the country’s criminal organizations (like “La Barbie,” El Grande, El Indio, etc.).

Many of us thought that such “decapitations” would continue, that it would be only a matter of months until a leader of the Sinaloa Cartel, the Zetas, or the Caballeros Templarios [Knights Templar] was detained or killed. But no; it has been 12 months and nothing has happened. Well, not exactly nothing. Some small-scale leaders have fallen (like Jose de Jesus Mendez, alias “El Chango,” who headed what remains of the Familia; Moises Montero, alias “El Koreano,” from the Independent Cartel of Acapulco; or Oscar Osvaldo Garcia Montoya, alias “El Compayito,” of the Mano con Ojos), along with a handful of second-tier figures (like the Sinaloa Cartel’s Noe Salgueiro; Jose Antonio Acosta, alias “El Diego” of the Juarez Cartel; Jesus Enrique Rejon, alias “El Mamito” from the Zetas, etc.). But when it comes to top capos, not a single one has been taken down in the last year.

Unless somebody gives me additional information, I will accept the most straightforward explanation for this: we simply haven’t found them. From media campaigns to the statements of the most important government officials, everything indicates that the federal government continues to believe that it is a good idea to decapitate criminal organizations. I have no doubt that, when the occasion presents itself, they will go after the remaining capos.

But is this the correct strategy? Is it worth it to destabilize the criminal underworld with the capture or killing of a high-profile figure? Several months ago, there was a debate over the issue, staged on Nexos and other forums, between Eduardo Guerrero and the current interior minister, Alejandro Poire. The dispute centered around one main question: does the decapitation of criminal organizations cause violence to increase in the short term?

The answer turned out to be yes, sometimes. The data presented by Poire and Guerrero showed that the takedown of a capo produced additional violence in some cases, but not others. In some cases, the absence of a boss does not necessarily lead to disorder. There may have been a brief spike in violence in the northwest of the country in the wake of the 1989 caputre of Miguel Angel Felix Gallardo, “El Padrino,” the boss of bosses of the Pacific Cartel (possibly even contributing to the death of Cardinal Posadas in 1993), but probably not after the arrest of the Gulf Cartel’s Juan Garcia Abrego in 1996.

In Colombia, first the arrest and then the death of Pablo Escobar saw an indisputable reduction in the number of homicides, but the arrest of the Cali Cartel’s Rodriguez Orejuela brothers likely had the opposite effect. The same goes for Italy and the United States; there are captures of criminal leaders which result in wars and others which bring peace.

For the sake of the argument, we will suppose that, on the whole, the decapitation of a criminal band tends to generate violence in the short term, due to succession conflicts, the unraveling of some groups, or through power vacuums that are exploited by rival groups. Is this reason enough not to abandon such a strategy? I believe not, for two fundamental reasons:

If criminals perceive that reaching a certain level of prominence makes them untouchable because their removal will have destabilizing effects, they will seek to make it that threshold. This dynamic could generate even more violence in the long term than high-value takedowns; it would be the equivalent in the criminal underworld of the “too big to fail” argument.

Cartel leaders are horrible people who deserve punishment. They are responsible for the torture, degradation and death of thousands of human beings. It seems morally inconceivable to me not to bring them to justice. Yes, without a doubt, the likely consequences should factor into this moral calculus, but it still seems to me a non-negotiable duty of the state to pursue those who corrupt, intimidate, kidnap, extort, torture and kill. Criminal justice does not simply exist to shape behavior; it also serves as an expression of societal values.

For these reasons (and others) a security policy must have an element which includes the decapitation of criminal groups. The discussion is not whether we should go after drug lords, and kill them if they resist, but over the criteria which should determine their pursuit. In my judgement, a policy of decapitation must have the following elements:

  • The priority level of a high value target should be determined not by the relative prominence or size of the organization, but by the intensity of the violence it causes. The more violent the criminal group (marked, for instance, by carrying out massacres), the more resources should be devoted to the capture of its main leaders. This decision should be completely explicit, but it should not keep officials from going after a cartel leader who is not deemed of high value if the opportunity presents itself.
  • Whenever possible, authorities should try to make sure that their targets are captured alive. In plain terms, a narco brought to justice is worth more than a mangled corpse. This is also particularly important considering the favorite Mexican pass-time of building conspiracy theories.
  • Likewise, whenever possible, each high-profile capture should be paired with the arrest of a number of lieutenants and foot soldiers, as a way to a.) maximize the impact and b.) lessen the risk of violence due to succession conflicts and fragmentation.
  • After the capture of a drug lord, officials should strengthen the presence of federal troops and other security forces in the organization’s area of influence, as a way of preventing an immediate backlash.
  • In some cases, their near-immediate extradition to the United States may be necessary. There are individuals who cannot be easily and safely held in a Mexican prison.

In summary, I am in favor of the government’s strategy of targeting cartel leaders, and will rejoice the day in which they capture “Lazcano,” “Treviño,” “Mayo Zambada,” “La Tuta,” or Chapo Guzman. I only hope that their downfall is accompanied by measures which prevent destabilizing effects, and maximize effects which dissuade violence. Decapitation is a powerful strategy, but it must be use prudently and strategically.

Translated and reprinted with permission from Alejandro Hope*, of Plata o Plomo, a blog on the politics and economics of drugs and crime published by Animal Politico. Read Spanish original here.

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Is the United States a Narco ‘Safe Haven’ for Mexican Drug Lords?

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By: Sylvia Longmire

For years, if not decades, Mexican drug lords and various upper-level members of Mexico’s transnational criminal organizations (TCOs) have resided in the United States. But because the savage drug war in Mexico has become so dangerous for them, they now prefer to spend more and more time at their “vacation” homes in the relative safety of US cities and communities.

Knowing that violent TCO members are living among us is disturbing on many levels, and has begged the question of whether the United States can be equated to Pakistan as a country that allows itself to be a “safe haven” for violent criminals and narco-terrorists?

In April 2006, the Department of State defined terrorist safe havens as follows:

A terrorist safe haven is an area of relative security exploited by terrorists to indoctrinate, recruit, coalesce, train, and regroup, as well as prepare and support their operations… Physical safe havens provide security for many senior terrorist leaders, allowing them to plan and to inspire acts of terrorism around the world. The presence of terrorist safe havens in a nation or region is not necessarily related to state sponsorship of terrorism. In most instances cited in this chapter, areas or communities serve as terrorist safe havens despite the government’s best efforts to prevent this.”

Using the State Department’s own definition, one only has to replace the term “terrorist” with the term “TCO,” and a strong argument can be made that the United States fits technically can be construed to be a narco-terrorist safe haven.

Even Mexican President Felipe Calderón believes the US is a safe haven for leaders of cartels based in his country. In October 2011 he told The New York Times Joaquin “El Chapo” Guzmán Loera – the capo of the Sinaloa Federation and arguably the most wanted man in the Western Hemisphere – was holed up somewhere north of the border.

“The surprising thing here is that he or his wife are so comfortable in the United States” that it “leads me to ask … how many families or how many Mexican drug lords could be living more calmly on the north side of the border than on the south side?” Calderón asked.

“What leads Chapo Guzmán to keep his family in the United States?” Calderón mussed.

Calderón broached the subject of Guzmán’s wife because in August 2011 Emma Coronel gave birth to twin girls in a Los Angeles hospital. Calderón said reporters ought to be asking why she was never detained.

There are no charges pending against Coronel; therefore, US law enforcement agents have no grounds to detain her. And, unfortunately, the same is true of many other members of Mexico’s TCOs who are residing in the United States.

The fact is many TCO members and individuals working for them have dual citizenship or are legal permanent residents of America. While they may have extensive criminal records in Mexico, as long as they haven’t committed a crime in the United States and Mexico hasn’t sought their extradition, they can lead relatively normal lives north of the border without law enforcement interference. This isn’t to say US law enforcement agencies aren’t aware of their presence or activities; it’s just that there’s not much they can do unless these TCO members commit a crime here.

It’s this situation that ultimately separates the United States from places like Pakistan when it comes to the “safe haven” definition. In April 2009, the State Department wisely updated their definition to read:

Terrorist safe havens are defined in this report as ungoverned, under-governed, or ill-governed areas of a country and non-physical areas where terrorists that constitute a threat to U.S. national security interests are able to organize, plan, raise funds, communicate, recruit, train, and operate in relative security because of inadequate governance capacity, political will, or both.”

There are no areas in the US southwest that can be defined as “ungoverned, under-governed or ill-governed.” The US government is also not actively assisting TCO members living in the country or purposely ignoring their presence. In fact, US southern border region law enforcement agencies are more alert than ever to the potential threats posed by TCO members living in their jurisdictions. But that doesn’t mean the Mexican government will see it that way.

President Calderón has pointed his finger at the United States and blamed the federal government for the violence in his country. He says the drug war is a direct result of Americans’ demand for illegal drugs and US guns laws that allow tens of thousands of firearms to be smuggled across the border every year. Based on his casual statements about “El Chapo” Guzmán possibly living in the US, his next salvo may be to declare the United States a “narco safe haven” and to attempt some sort of legislative (and ultimately symbolic) action to this end.

Hopefully, this isn’t where Calderón is headed. He knows the US government is trying to fight this war as a partner with Mexico, despite its various policy shortcomings. President Obama also knows Calderón’s approval rating has been slipping and that his political party isn’t faring well in the run-up to Mexico’s July 2012 presidential election. It’s possible Calderón may still try to play the “narco safe haven” card, but if he does, it undoubtedly will be rebuffed by Obama.

In the meantime, US agencies can work harder to make America a much more difficult operating environment for TCO members by more aggressively scrutinizing suspicious financial transactions and expanding human intelligence networks to identify future drug smuggling activity.

Mexico’s “narcos” don’t operate in a vacuum on either side of the border. And while their networks are extremely difficult to penetrate, it’s not impossible. US law enforcement agents just need the proper tools and support to ensure that TCO members’ lives here are made as difficult as possible – that they’re made to understand their presence north of the border isn’t welcome.

A retired Air Force captain and former Special Agent with the Air Force Office of Special Investigations, Homeland Security Today correspondent Sylvia Longmire worked as the Latin America desk officer analyzing issues in the US Southern Command area of responsibilty that might affect the security of deployed Air Force personnel. From Dec. 2005 through July 2009, she worked as an intelligence analyst for the California state fusion center and the California Emergency Management Agency‘s situational awareness Unit, where she focused almost exclusively on Mexican drug trafficking organizations and southwest border violence issues. Her book, “Cartel: The Coming Invasion of Mexico’s Drug Wars,” was published in Sept. To contact Sylvia, email her at: sylvia(at)longmireconsulting.com.

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