Mexico LNG Project Clears US Hurdle

Mexico LNG Project Clears US Hurdle
Sempra Energy's Energia Costa Azul LNG subsidiary has won two key authorizations from the US Department of Energy.

The liquefaction-export project that Sempra Energy’s Energia Costa Azul (ECA) LNG subsidiary is developing in Baja California, Mexico has won two key authorizations from the U.S. Department of Energy (DOE).

Sempra reported Sunday that the DOE has authorized ECA to export U.S.-produced natural gas to Mexico and to re-export liquefied natural gas (LNG) to countries that do not have free trade agreements with the United States. The pair of DOE authorizations apply to Phases 1 and 2 of the project, Sempra added.

“The timing of these approvals is great news as we meet with customers and partners this week in Shanghai,” Joseph A. Householder, Sempra’s president and CEO, said in a written statement. “ECA LNG’s location on the West Coast of North America is truly a differentiator and it has the potential to be a game changer. ECA LNG will source natural gas from some of the fastest-growing production regions in the U.S. and provide our customers with a competitive advantage in accessing world markets, especially Asia.”

Since 2008, Sempra has operated the existing ECA regasification facility north of Ensenada, Baja California – the first LNG receipt terminal on the west coast of North America. The facility can process up to 1 billion cubic feet (Bcf) of natural gas per day, Sempra stated. ECA aims to add liquefaction capability over two phases. Phase 1 would add a single LNG train adjacent to the LNG receipt terminal and would use existing LNG storage tanks, marine berth and associated facilities, stated Sempra. Phase 2 would add two trains and an LNG storage tank.

According to Sempra, the DOE authorizations allow ECA to export 636 Bcf per year of U.S.-sourced LNG from the infrastructure projects. Phase 2 will need additional DOE approval in order to export its full expected capacity, the company added.

“The authorizations are another step forward in the development of this project that could bring many benefits for Mexico, U.S. natural gas producers and our customers and partners in greater Asia,” Carlos Ruiz Sacristan, chairman and CEO of Sempra North American Infrastructure, said. “We are pleased to continue to advance the development of ECA LNG, which can uniquely meet the energy needs of isolated markets in Mexico and customers in Asia.”

Sempra on Nov. 7, 2018, announced that it had signed three heads of agreements with affiliates of Total S.A., Mitsui & Co., Ltd. and Tokyo Gas Co., Ltd for the full export capacity of Phase 1. More than four months earlier, the company reported that it had named a partnership of TechnipFMC and Kiewit as the project’s engineering, procurement, construction and commissioning contractor.


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.