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Sempra Energy to Boost Mexican LNG With US$2.4 Million Investment

By Peter Appleby | Mon, 07/13/2020 - 13:10

Following the meeting of presidents of Mexico and the US last week, US energy company Sempra Energy announced it will invest between US$1.9 billion and US$2.4 billion in Mexico.

According to El Economista, Sempra Energy’s investment will be focused on the LNG plant in Ensenada, Baja California owned by its Mexican subsidiary Energía Costa Azul (ECA), as well as on “the storage, transport and distribution of liquid natural gas” for the Mexico-US border region.

The media outlet noted that the company took to Twitter to detail the investment and said it marks the benefits that USMCA brings to the region. "Our proposed US$1.9 billion ECA LNG export project, which is expected to create 5,000 highly skilled jobs in the United States, is testimony to the benefits of T-MEC (USMCA) and the new phase of cooperation in North America," Sempra posted on his Twitter account.

The investment will enhance Sempra Energy’s ability to transport natural gas to the ECA plant, liquify it and export it back to US gas markets ahead of export to other regions, particularly Asia. When natural gas has been liquified – cooled to -260°F – its volume is some 600 times smaller than in its gaseous state.

In March 2019, ECA received “US non-FTA approval for liquification-export infrastructure in Mexico.” The company’s website announced that “its subsidiary Energía Costa Azul (ECA) LNG received two authorizations from the US Department of Energy (DOE) to export US produced natural gas to Mexico and to re-export LNG to countries that do not have a free-trade agreement with the US, from its Phase 1 and Phase 2 liquefaction-export facilities in development in Baja California, Mexico.”

ECA’s facilities currently include “one marine berth and breakwater, two LNG tanks of 160,000m³ each, LNG vaporizers, nitrogen injection systems and pipeline inter-connections,” the company says.

The investment marks an important point after the beginning of USMCA and the meeting between Mexico’s President Andrés Manuel López Obrador and US President Donald Trump.

President López Obrador made his first official visit abroad 19 months into his presidency to meet the US president. During the visit, the two men held dinners with an assortment of public and private leaders, including a business-focused dinner with invitees including engineering magnate Carlos Slim, Founder and President of telecommunications and technology company Telmex; Grupo Salinas’ Ricardo Salinas Pliego and Director of major mining company Grupo México, Germán Larrera.

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Peter Appleby Peter Appleby Journalist and Industry Analyst