Sempra Receives Expressions of Interest from Costa Azul

US firm Sempra LNG, a subsidiary of Sempra Energy (NYSE: SRE), has received non-binding expressions of interest for the proposed expansion of its Costa Azul liquefied natural gas (LNG) receiving terminal in Mexico's Baja California state, the company said in a statement.

The project would expand the terminal's storage and send-out capacity to 2.5 billion cubic feet a day (Bf3/d) of natural gas from 1Bf3/d.

"Sempra LNG will immediately begin working with the shippers who submitted bids to develop binding terminal service agreements," said the statement, adding the expansion's ultimate size, scope and cost will depend on the commercial agreements.

"We expect to make the capacity agreement announcements on the expansion between now and the end of the year," Sempra spokesperson Art Larson told BNamericas.

Additional details, such as the number and names of those that submitted expressions of interest, were not disclosed.

Construction on the initial phase of the terminal to develop 1Bf3/d of capacity is more than 30% complete. The terminal is 15 miles north of Ensenada and is expected to be operational in early 2008.

Pending regulatory approvals and successful commercial negotiations, the expansion could become operational as early as 2010.

Sempra has committed 40% of its stake in future gas production from the US$800mn Costa Azul to supply Baja California including its Mexicali thermoelectric generation plant, BNamericas reported previously.

The US company has a 50% stake in the project's estimated 1Bf3/d initial output, while its partner Anglo-Dutch oil firm Shell (NYSE: RDS-B) has the other 50%, according to a 20-year agreement signed by both companies in 2004.

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