Mexican LNG exports come closer

Thursday, 04 April 2019
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Sempra Energy’s subsidiary Energía Costa Azul (ECA) LNG has received two US Department of Energy (DOE) authorisations to export US produced natural gas to Mexico and to re-export liquefied natural gas (LNG) to non-FTA countries.

The exports will be handled from ECA’s Phase 1 and Phase 2 liquefaction facilities under development in Baja California, Mexico.

"The timing of these approvals is great news as we meet with customers and partners in Shanghai," said Joseph Householder, Sempra Energy president and COO. "ECA LNG's location on the West Coast of North America is truly a differentiator and it has the potential to be a game changer. ECA LNG will source natural gas from some of the fastest-growing production regions in the US and provide our customers with a competitive advantage in accessing world markets, especially Asia."

"The authorisations are another step forward in the development of this project that could bring many benefits for Mexico, US natural gas producers and our customers and partners in greater Asia," said Carlos Ruiz Sacristán, chairman and CEO of Sempra North American Infrastructure. "We are pleased to continue to advance the development of ECA LNG, which can uniquely meet the energy needs of isolated markets in Mexico and customers in Asia."

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

DOE has authorised the export of 636 bill cu ft per year of US sourced LNG from these infrastructure projects. Phase 2 of the project will require an additional DOE approval in order to export its full scheduled capacity.

ECA’s existing receiving terminal was the first one to be built 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 bill cu ft of natural gas per day.

Last November, Sempra 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.

Both 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.

Its development is contingent upon obtaining binding customer commitments, completing the required commercial agreements, securing all necessary permits, including additional export authorisation from the Mexican and US governments, obtaining financing, incentives and other factors, and reaching a final investment decision (FID).

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