Mexican Costa Azul LNG export project set to move forward soon in state of Baja California

Wednesday, 25 March 2020
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Sempra Energy said its Mexican subsidiary would move forward in 2020 with the Costa Azul liquefied natural gas export project in the northern Pacific Coast state of Baja California with permits already in place to re-export as LNG pipeline supplies imported from the US.

Sempra said a final investment decision to transform the existing Costa Azul import terminals into an export plant would come in the second quarter, pushed back from the first quarter, though all preparations were on track.

“The current economic environment may impact the schedule,” said Justin Bird, President of Sempra LNG. “However, the company remains confident in the long-term demand for LNG,” added Bird.

Sempra subsidiary IEnova, or Infraestructura Energetica Nova SA as it is officially known, is overseeing the project.

Costa Azul will have its liquefaction capability constructed in two phases. 

The first part of the transformation of the plant will see the building of a single liquefaction Train to be located adjacent to the existing terminal and with capacity for 2.4 MTPA of exports.

The Mexican project has already signed three accords with French major Total and Japanese companies Mitsui & Co. and Tokyo Gas for the full export capacity of Phase 1 development at Costa Azul.

The Costa Azul venture has additionally received US authorizations for natural gas to be exported to Mexico and re-exported to Non-Free Trade Agreement countries. 

Costa Azul was the first LNG import terminal on North America's West Coast and was built in 2008 about 15 miles north of Ensenada and with bi-directional pipeline connects to the US.

The Costa Azul facility previously benefited from south-to-north flows on the North Baja pipeline. However, north-to-south flows on the West Coast now predominate.

Sempra’s IEnova unit continues to be a main natural gas pipeline developer in Mexico.

Among the projects, IEnova’s South Texas-Tuxpan pipeline is a crucial outlet for US natural gas to the southern Gulf Coast side of the country.

This pipeline is seen as fundamental to maintaining a reliable gas service in the southeast of Mexico with 2.6 billion cubic feet per day of capacity.

The pipeline crosses part of the Gulf of Mexico from Texas and was built at a cost of $2.5 billion. It is owned by IEnova and Canadian pipeline company TC Energy.

The South Texas-Tuxpan pipeline is inter-connected to the Valley Crossing Pipeline in Texas completed by Enbridge Inc., another Canadian company like TC Energy and based in Calgary.

The 168-mile Valley Crossing pipeline runs from the Agua Dulce hub in Texas to the Gulf of Mexico east of the port of Brownsville.

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