BajaNews - 3-14-2006 at 08:39 PM
http://www.nctimes.com/articles/2006/03/14/news/sandiego/19_...
By: ELLIOT SPAGAT
Associated Press
SAN DIEGO -- Sempra Energy proposed Monday to more than double capacity at its liquefied natural gas terminal under construction in Mexico,
strengthening its position in the race to build the first such plant on North America's Pacific coast.
Sempra is building in Mexico at a time when rivals seeking permission in California are stumbling over opposition from environmental and NIMBY -- "not
in my back yard" -- groups.
The expansion plan is a response to "significant interest we have received from a number of potential natural gas producers and marketers," said
Darcel Hulse, president of Sempra's LNG unit. Sempra declined to name potential customers.
Sempra, based in San Diego, said it asked Mexican authorities for permission to raise daily production to 2.5 billion cubic feet from 1 billion at its
plant in Ensenada, about 50 miles south of San Diego.
California currently consumes about 6 billion cubic feet of natural gas a day.
The plant is expected to open in 2008, and Sempra said the expansion may be completed in 2010. It said the precise scope of the expansion and the cost
depends on customer interest.
Sempra plans to sell about half of initial production in the western United States and the other half in the Mexican state of Baja California. Company
spokesman Art Larson said more information on where the additional capacity might be sold won't be disclosed until agreements are reached.
LNG is supercooled liquefied gas that is shipped from far-flung countries to coastline terminals, where it is heated, vaporized and fed into a
pipeline. Sempra and other companies contend that LNG is key to keeping a lid on gas prices in the United States as domestic supplies dwindle.
U.S. regulators have approved nine coastal terminals in Texas, Louisiana and Massachusetts, but companies have struggled to find a home on the U.S.
Pacific coast.
Mexico has approved two LNG terminals on its Pacific coast, one by Sempra and another by Chevron Corp., though Chevron hasn't begun construction.
Sempra's expansion will have no impact on whether Chevron decides to build its terminal, said Chevron spokeswoman Margaret Cooper.
Bill Powers of the Border Power Plant Working Group, who has criticized Sempra's plans, said the energy giant's expansion may make it more difficult
for rivals to justify building LNG terminals on the Pacific coast.
"They're way ahead of everybody else," he said. "It could effectively kill the other projects. There isn't enough room."
Asian LNG Producers, Buyers May Bid for Mexican Port Capacity
BajaNews - 3-14-2006 at 08:40 PM
http://www.bloomberg.com/apps/news?pid=10000086&sid=a1q1...
March 14 (Bloomberg) -- Australian, Malaysian and Middle Eastern producers of liquefied natural gas as well as buyers in Japan and South Korea may bid
to deliver the fuel to a proposed $800 million expansion of Sempra Energy's Mexican import terminal.
Bids to use new capacity at the terminal on Mexico's Pacific coast may also come from companies seeking to aggregate LNG from different suppliers for
sale into North America, Darcel Hulse, president of Sempra's LNG unit, said in an interview today. He declined to name potential bidders.
San Diego-based Sempra, owner of the largest U.S. natural gas utility, said yesterday it will seek bids from LNG producers and marketers with the aim
of possibly doubling capacity at its Energia Costa Azul LNG import terminal by 2010. The terminal, which is due to start operating in 2008, is the
first to be built on the North American west coast, the closest entry point for Asian companies wanting to sell into the U.S. market.
``Having the opportunity to capture a spot in the market place is very important for those that have gas resources and that's what we're offering
here,'' Hulse said. ``There's a number of interests, and one is certainly from the producers side, those that have gas reserves that want to use the
west coast marketplace as an opportunity to monetize those assets.''
Chevron Corp.'s proposed A$11 billion ($8 billion) Gorgon LNG venture and the Woodside Petroleum Ltd.-operated North West Shelf venture are among
Australian LNG projects that have said they may sell LNG into North America. BHP Billiton and Woodside are also seeking approvals for their own
terminals on the west coast of North America.
Selling On
Tokyo Electric Power Co., Asia's largest utility, said last week it will buy Oman LNG from Mitsubishi Corp. under a trading agreement that allows the
utility to sell some fuel on to buyers in the U.S.
LNG is natural gas that has been cooled to liquid form, reducing it to one-six-hundredth of its original size for transportation by tanker to
destinations not connected by pipeline. On arrival it is turned back into gaseous form at import terminals for delivery to customers such as power
plants.
The $800 million Energia Costa Azul terminal, located 14 miles north of Ensenada, Baja California, will have an initial import capacity of 1 billion
cubic feet a day, which may be expanded to 2.5 billion cubic feet a day by 2010 depending on the bids received, Sempra said. It invited bids from
potential users of the capacity in a so-called ``open season,'' which will run from April 17 to May 12.
Expansion Cost
The cost to expand the terminal to the maximum envisaged may be between $700 million and $800 million, Hulse said. Royal Dutch Shell Plc, which has
the right to half the terminal's initial capacity, also has the right to some of the additional capacity, he said.
Initial LNG deliveries to the Sempra terminal are scheduled to come from BP Plc's Tangguh project in Indonesia and Shell's Sakhalin venture in eastern
Russia.