Sempra signs three HOAs for Mexico LNG project

Sempra Energy announced that its subsidiaries Infraestructura Energetica Nova S.A.B. de C.V. and Sempra LNG & Midstream have signed three Heads of Agreements with affiliates of Total S.A., Mitsui & Co., Ltd. and Tokyo Gas Co., Ltd. for the full export capacity of Phase 1 of the Energia Costa Azul liquefied natural gas (ECA LNG) project located in Baja California, Mexico.

ECA LNG Phase 1 is a single-train liquefaction facility to be located adjacent to the existing LNG receipt terminal and expected to produce approximately 2.4 million tonnes per annum (Mtpa) of LNG for export to global markets. 

The ECA LNG receipt terminal was the first LNG receipt terminal constructed 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 billion cubic feet of natural gas per day.

The agreement will help provide low-cost, flexible operations and reliable LNG to the Pacific Basin market and to supply the Baja California peninsula market in Mexico.

The three HOAs for ECA LNG Phase 1 contemplate the parties negotiating and finalizing definitive 20-year LNG sales-and-purchase agreements. The three companies each will potentially purchase approximately 0.8 Mtpa of LNG from ECA LNG Phase 1. A final investment decision for ECA LNG is targeted in late 2019 with potential first LNG deliveries in 2023. 

In June, TechnipFMC and Kiewit were selected as the engineering, procurement, construction and commissioning contractor for the ECA LNG project, subject to reaching a definitive agreement on the EPC contract.