Sempra Launches Open Season for LNG Terminal Expansion

Sempra LNG recently announced the start of a non-binding open season to solicit shipper interest for a proposed expansion of the Energia Costa Azul liquefied natural gas (LNG) receipt terminal. The proposal calls for increasing the terminal's storage and send-out capacity from 1 billion cubic feet of natural gas per day (Bcfd) to 2.5 Bcfd.

The company states that expansion-related permits have been filed with Mexico's national energy regulatory agency and the country's environmental protection agency--the Comision Reguladora de Energia (CRE), and SEMARNAT, respectively. The open season is scheduled to begin at 9 a.m. Pacific Time on Monday, April 17, 2006, and continue until 5 p.m. Pacific Time on Friday, May 12, 2006. It will be conducted in accordance with the Mexican laws and regulations governing open-access terminals.

"The proposed expansion and open-season process represent a response to the significant interest we have received from a number of potential natural gas producers and marketers for more capacity at the Energia Costa Azul receipt terminal," said Darcel Hulse, president of Sempra LNG. "Our project will be the first of its kind along the West Coast of North America. Because of the strategic location and the interest expressed by potential clients, we expect this open season to proceed very well."

The initial construction phase of the $800 million receipt terminal project is underway 14 miles north of Ensenada, Baja California, Mexico. That phase is approaching 30-percent completion and will be operational in 2008. Pending market interest and regulatory approvals, the expansion could become operational in 2010. The specific size, scope, and cost of the expansion would depend upon the response received as a result of the open season.