Sempra Energy to go ahead with $2bn Mexican LNG export project

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lng export project
Energía Costa Azul regasification terminal in Baja California, Mexico. Image credit: Sempra LNG.

Sempra Energy has announced a final investment decision (FID) to construct the Energía Costa Azul LNG export project in Baja California, Mexico.

The LNG export project is expected to improve the trade balances of the US and Mexico.

In the wake of the coronavirus pandemic, the Energía Costa Azul project become the only LNG export project in the world to reach FID in 2020.

The first phase of the LNG project will be construct with an estimated investment of approximately $2bn.

The construction costs for the project are expected to be funded with a combination of equity contributions and debt.

Sempra LNG and IEnova, Sempra Energy’s subsidiary in Mexico, will build and operate the first phase section of the project.

The Energía Costa Azul facility is expected to start producing LNG in late 2024.

Featuring a single-train liquefaction unit, the facility will have a nameplate capacity of 3.25 million tonnes per annum (Mtpa) of LNG.

During the construction phase, the project is expected to create more than 10,000 direct and indirect jobs in both countries.

“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,” said Tania Ortiz Mena, CEO of IEnova.

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

For the first phase, the project has 20-year sale and purchase agreements with Mitsui and an affiliate of Total for 2.5 Mtpa of LNG.

With the FID taken, TechnipFMC has been issued a notice to proceed for an EPC contract for the LNG export project.

Having involved in the project since 2017, TechnipFMC has already delivered the Front End Engineering Design (FEED) for the Mexican LNG export project.