US$2 billion Pacific LNG Export Project Advances

A joint venture between Sempra LNG and Infraestructura Energetica Nova, SAB de CV (IEnova) has taken a final investment decision (FID) to develop, construct and operate the Energia Costa Azul LNG (ECA LNG) Phase 1 project in Baja California, Mexico.

The first liquefaction-export facility on North America’s Pacific Coast, ECA LNG is also the world’s only such project to reach FID so far this year, Sempra Energy pointed out in a written statement on the 17^th November.

The Ensenada, Baja California, site currently hosts the ECA regasification terminal and includes marine berth and breakwater, LNG storage, pipeline interconnections and other infrastructure, Rigzone reported earlier this year.

“This project would be the first LNG export facility on the Pacific Coast of North American which can help connect abundant natural gas supplies from Texas and the Western US directly to markets in Mexico and countries across the Pacific Basin,” remarked Justin Bird, Sempra LNG’s CEO.

“This important milestone is a testament to the resiliency of our team and marks the latest step toward our goal to be North America’s premier LNG infrastructure company.”

Sempra LNG and IEnova will build and operate the estimated US$2 billion ECA LNG Phase 1 as a single-train liquefaction facility, Sempra Energy explained. It noted the facility will boast a nameplate capacity of 3.25 million tonnes per annum (mtpa) of LNG and an initial offtake capacity of approximately 2.5 mtpa of LNG.

“As one of the largest private investments in the history of Baja California, ECA LNG’s liquefaction-export project is expected to help support the Mexican economy through investment, tax revenue and jobs,” commented IEnova CEO Tania Ortiz Mena.

“The project is also expected to positively impact the local community through social investment programmes as well as help position Mexico as a key player in the global trade of natural gas.”

ECA LNG executed a lump-sum, turnkey engineering, procurement and construction (EPC) contract with a TechnipFMC Plc affiliate in February of this year for Phase 1 of the project, noted Sempra Energy. Sempra anticipates 10,000-plus direct and indirect jobs during construction and roughly 75 full-time jobs during operations.

TechnipFMC reported separately on the 17^th November that it has received a notice to proceed for the EPC contract.

According to Sempra, ECA LNG has secured definitive 20-year sale and purchase agreements with Mitsui & Company Ltd and a Total SE  affiliate for approximately 2.5 mtpa of LNG from Phase 1.

Total may also make an equity investment in the project, Sempra noted.

A Phase 2 of ECA LNG is a possibility at some point, Sempra Energy stated.

The FID to proceed with ECA LNG Phase 1 won praise from the Western States and Tribal Nations (WSTN) Natural Gas Initiative.

“This significant milestone will help to connect abundant natural gas supplies from the western US directly to countries across Asia where energy demand is soaring from manufacturing and economic growth – all while helping to lower global emissions by developing and offering lower-emitting fuel alternatives to growing international markets,” remarked WSTN President Andrew Browning.

The project will serve as an opportunity for Rockies-produced energy resources to help expand trade and infrastructure development and benefit communities in the US and Asia, added WSTN Chairman Jason Sandel.

“Thankfully, the comparative advantage of using natural gas from the western US will enable Energia Costa Azul to become a major North American west coast energy export hub to countries across Asia who are eager for access to lower-emitting fuels,” Mr Sandel concluded.

Source: Rigzone