Sempra, Shell on Course for LNG Land Permit

It is "practically a fact" that energy companies Shell and Sempra will receive a land permit for their proposed liquefied natural gas (LNG) terminal at Costa Azul in Mexico's Baja California state, the state's minister for economic development, Sergio Tagliapietra, told BNamericas.

Tagliapietra addressed a letter to "the international community" on March 12 saying that the state supports companies "that have met all the legal and technical requirements associated with LNG projects in Baja California." The move reflected concern about the possible negative fallout in the international business community when US company Marathon abandoned a US$1.5bn energy complex after the state government expropriated the land where the project was planned.

The state government maintains that Marathon did not follow the proper procedure because the company never applied for permission from the state and Tijuana municipal authorities although it obtained a permit from national energy regulator CRE in 2003.

"Companies know that it is necessary to comply with the regulations as well as responding to the market demands. Sticking to the law guarantees and gives certainty to investments," Tagliapietra said. "We are a state that promotes investment and aim to provide the best information possible for companies to make decisions.

On the other hand, companies should act in accordance with the regulations that apply in each case," he added.

Apart from the Sempra-Shell project, ChevronTexaco plans a regasification terminal 13km offshore from Tijuana. "Both projects will generate benefits and contribute to the strengthening of our state's infrastructure, making us more attractive to investment. However, it is not the state government alone that determines whether these plants get built," Tagliapietra said.

Shell and Sempra have received a permit from the CRE and ChevronTexaco expects to receive one sometime this year, but the latter's project has attracted negative press because of its location near the environmentally-sensitive Coronado Island.

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