LNG

Annova LNG, the medium-scale US project planned for the south bank of the Brownsville Ship Channel in Texas, will not now be proceeding following a decision by investors to cancel the venture, while the Chief Executive has already left the project to join Canadian pipeline company TC Energy.

Infraestructura Energética Nova (IEnova), the subsidiary in Mexico of Cameron LNG plant owner Sempra Energy and with plans for Mexican LNG production, reported a third-quarter increase in earnings.

Sempra Energy’s Mexican subsidiary IEnova said objections had been formally lodged against its Pacific Coast Costa Azul liquefied natural gas export plant in the nearby city of Ensenada.

Sempra plans to have two more North American export plants in addition to its existing Cameron LNG facility at Hackberry in Louisiana and these include a Texas project at Port Arthur and at Costa Azul in the Mexican state of Baja California.

Now IEnova has just announced that objections have been raised before the Office of Urban Management, Ecology and Environment of Ensenada’s city council.

IEnova said in a statement that the objections are against certain municipal permits granted in favor of the Costa Azul liquefaction project that is being developed on land adjacent to the existing LNG import terminal.

“IEnova considers that these claims are unfounded and inadmissible and will enforce their rights in the corresponding procedure, seeking to dismiss the claims of the plaintiffs,” said the company.

The objectors are two real estate companies named by IEnova as Inmuebles y Fraccionamientos Peninsulares SA and Inmobiliaria Aquino SA.

The Sempra subsidiary, whose official name is Infraestructura Energetica Nova SA , is overseeing the whole LNG project in addition to its growing Mexican business in the natural gas pipeline and energy and power sectors.

Under Sempra’s plan for the Costa Azul export plant, the facility will be 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. It is located 15 miles north of Ensenada and with bi-directional pipeline connections 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 its assets are its stake in the South Texas-Tuxpan pipeline bringing 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. 

US Rio Grande LNG project developer NextDecade has issued a corporate update saying it has resources to maintain operations through 2021 and has delayed its final investment decision until next year on the venture proposed for the Port of Brownsville in Texas.

Annova LNG, the medium-scale US project planned for the south bank of the Brownsville Ship Channel in Texas, and whose owners include Chicago-based power company Exelon Corp., has received one of its final permits to begin construction.

The US Annova liquefied natural gas export project planned for the south bank of the Brownsville Ship Channel in Texas, and whose owners include Chicago-based power company Exelon Corp., has signed an accord to arrange feed-gas deliveries from the Agua Dulce hub in Texas.

IEnova, the Mexican subsidiary of California-based utility Sempra Energy and developer of the Costa Azul LNG export terminal on the Pacific Coast of Mexico, said third-quarter earnings declined, though it expected future profits from the commercial start-up of the new natural gas pipeline from Texas to Mexico.

NextDecade Corp., the Texas LNG project company has signed an accord with Enbridge Inc, the Canadian pipeline company, to jointly develop pipelines in South Texas to take feed-gas to the Rio Grande LNG export plant planned for the Port of Brownsville.

NextDecade is planning the Rio Grande liquefaction facility and its associated Rio Bravo Pipeline.

Rio Bravo is designed to transport 4.5 billion cubic feet per day of natural gas from the Agua Dulce area to the Rio Grande export plant at Brownsville.

NextDecade said its intention is to develop an export path for natural gas from the Permian Basin to the global LNG market.

Under current plans, NextDecade’s Rio Grande plant will have capacity to produce around 27 million tonnes per annum of LNG.

“Enbridge is one of North America’s leading energy infrastructure companies and we look forward to exploring a strong partnership in South Texas,” said NextDecade Chairman and Chief Executive Matt Schatzman.

“With its Texas Eastern Pipeline and recently completed Valley Crossing Pipeline, Enbridge has extensive permitting, construction, and operating experience in the State of Texas, especially in South Texas,” added Schatzman.

Bill Yardley, Enbridge’s President of Gas Transmission and Midstream, said the Toronto-listed company was excited to be working with NextDecade for pipeline solutions in the US export market.

“Our existing infrastructure fits very well with the Brownsville location,” explained Yardley.

“This is a continuation of our strategy to bring our major projects execution and permitting capability to the expanding LNG export efforts in North America,” he stated.

Both companies anticipate finalizing definitive documentation reflecting the terms of their current accord in the fourth quarter of 2019.

The Rio Grande project in May 2019 signed fully wrapped lump-sum turnkey engineering, procurement and construction contracts with Bechtel, including cost, schedule and performance guarantees.

The EPC contracts are for the first phase of the Rio Grande facility, comprising three liquefaction Trains, two 180,000 cubic metres storage tanks and two marine berths totaling exactly $9.56 billion.

Each Rio Grande liquefaction train for the Brownsville plant is expected to have capacity up to 5.87 MTPA, which would generate an EPC cost of around $543 per ton for the first three Trains.

Sempra Energy, the California-based utility and owner of the Cameron LNG export plant in Louisiana, said its Mexican subsidiary had reached agreement with the regulators in Mexico on two key natural gas pipelines supplying cross-border US supplies.

One of the main pipelines planned to ship US natural gas to Mexico, whose route is from South Texas to the Mexican state of Veracruz, is scheduled to enter service in the weeks ahead after some hold-ups caused by bad weather and will lessen LNG requirements.