Sempra Energy Unit Gets US Non-FTA Approval for Liquefaction-Export Project In Mexico

Sempra Energy’s subsidiary Energía Costa Azul (ECA) LNG received two authorizations from the US Department of Energy (DOE) to export US produced natural gas to Mexico and to re-export LNG to countries that do not have a free-trade agreement (non-FTA) with the US.

Natural gas will be sourced from the company’s Phase 1 and Phase 2 liquefaction-export facilities in development in Baja California, Mexico.

“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,” Joseph A. Householder, president and chief operating officer for Sempra Energy, commented.

“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 Sacristán, chairman and CEO of Sempra North American Infrastructure, said.

“We are pleased to continue to advance the development of ECA LNG, which can … meet the energy needs of isolated markets in Mexico and customers in Asia,” he added.

ECA LNG Phase 1 is a single train LNG facility to be located adjacent to the existing LNG receipt terminal. It is expected to utilize current LNG storage tanks, marine berth and associated facilities. Phase 2 of the project will include the addition of two trains and one LNG storage tank.

The DOE authorizations allow the export of 636 billion cubic feet (Bcf) a year of US-sourced LNG from these infrastructure projects. Phase 2 of the project will require additional DOE approval in order to export its full expected capacity.

The existing ECA receipt terminal was the first LNG receipt terminal constructed on North America’s West Coast. Located about 15 miles north of Ensenada, Baja California, it began commercial operations in 2008 and is capable of processing up to 1 Bcf of natural gas per day.

Last November, Sempra Energy announced that its subsidiaries IEnova and Sempra LNG had signed Heads of Agreements (HOAs) with affiliates of Total, Mitsui & Co., and Tokyo Gas for Phase 1 of the ECA LNG project, subject to reaching definitive agreements. TechnipFMC and Kiewit were selected as the engineering, procurement, construction and commissioning (EPC) contractors for the project, subject to reaching a definitive agreement on the EPC contract.

Development of the ECA LNG liquefaction project is subject to relevant conditions and financing agreements.