Sempra Infrastructure’s Mexican developments, Energía Costa Azul (ECA LNG) and Vista Pacifico LNG, have received authorisation to re-export US-sourced LNG to non-Free Trade Agreement (FTA) nations.
This authorisation from the US Department of Energy (DoE) was described as an important milestone for the two development projects.
“Advancing new infrastructure investments is critical to supporting the energy needs of America’s allies, and we are grateful for the leadership of the Biden Administration, US Energy Secretary, Jennifer Granholm, and various Congressional stakeholders—including Senators Joe Manchin, Ted Cruz and John Cornyn,” said Justin Bird, Sempra Infrastructure CEO.
“These export projects are expected to support efforts across the Indo/Pacific region to diversify energy supplies, while transitioning away from coal in power production. They are also expected to help strengthen US trading relationships, as well as create new jobs and boost the US and Mexico economies,” he added.
Under the DoE permits, Vista Pacifico LNG is authorised to re-export up to 200 bill cu ft per year of LNG from US-sourced natural gas from the project under development in Topolobampo, Sinaloa to any country with which the US does not have an FTA requiring national treatment for trade in natural gas.
Vista Pacifico LNG is planned as a mid-scale facility with around 3.5 mill tonnes per annum of export capacity. Sempra Infrastructure is advancing its development in collaboration with Mexico’s Federal Electricity Commission (CFE).
The authorised export volumes of ECA LNG Phase 2 were also increased by the DoE, allowing it to re-export up to 636 bill cu ft per year of LNG from US-sourced natural gas from the proposed project in Ensenada, Baja California to non-FTA nations.
Both permits are applicable for the period beginning on the date of first commercial re-export through December, 2050.
The proposed ECA LNG Phase 2 is expected to include two trains and one LNG storage tank and produce about 12 mill tonnes per annum of export capacity.
This project received non-FTA export authorisation in 2019 and is currently under construction with commercial operations expected to come online in 2025.
Development of both ECA LNG Phase 2 and Vista Pacifico LNG is contingent upon completing the required commercial agreements, securing all necessary permits, obtaining financing, and reaching a final investment decision (FID), among other factors, Sempra said.
Once in operation, the plants will allow LNGCs to cut sailing times to Asian destinations, compared to loading in the US Gulf, as a Panama Canal transit will be avoided.
Long term SPA
Sempra Infrastructure has also signed a long-term sale and purchase agreement (SPA) with RWE Supply & Trading, a subsidiary of German energy company RWE, to supply of around 2.25 mill tonnes per annum of LNG.
The LNG will be supplied from the Port Arthur LNG Phase 1 project under development in Jefferson County, Texas. It will be delivered on a free-on-board (FOB) basis for 15 years.
In addition, the agreement provides a framework to explore ways to lower the carbon intensity of LNG produced from the project through GHG emission reduction, mitigation strategies and a continuous improvement approach.
Sempra Infrastructure earlier announced it had entered into long-term agreements with ConocoPhillips, INEOS and ENGIE for the sale and purchase of around 7.3 mill tonnes per annum of LNG from the Phase 1 project.
The company also said that it is focused on completing the remaining steps necessary to achieve its goal of making a final investment decision (FID) for the project’s Phase 1 in the first quarter of 2023, with first cargo deliveries expected in 2027.
Port Arthur LNG Phase 1 project is permitted and expected to include two natural gas liquefaction trains and LNG storage tanks and associated facilities capable of producing, under optimal conditions, up to about 13.5 mill tonnes per annum of LNG.
A similarly sized Phase 2 project is also competitively positioned and under active marketing and development, Sempra said.
