Located eight miles offshore the terminal will have the capacity to handle 1.4 billion cubic feet of gas shipped in liquid form by tanker.

Pending Mexican permit approvals construction of the project would begin next year with processing of LNG shipments scheduled to start in the fourth quarter of 2007.

ChevronTexaco is already waiting on regulatory approval for its proposed terminal in the Gulf of Mexico known as Port Pelican.

Offshore terminals have become an increasingly popular option as companies face stiff resistance from residential developers and action committees for coastal property.

In August BHP Billiton announced plans to build a $US500 million floating LNG terminal off the Californian coast.

If approved, the proposed $US550 million terminal could be operational in 2008 and will lie 21.5 miles from Oxnard off the Ventura County coast and would be a permanently moored FSRU.

The FSRU design features three LNG storage tanks capable of storing the equivalent of 6 billion cubic feet of natural gas and will contain eight vaporizers to enable the conversion of up to 1.5 billion cubic feet of natural gas per day.