Energía Costa Azul is seeking to add natural gas liquefaction facilities to its existing receipt and regasification terminal. The proposed facilities include two natural gas liquefaction trains capable of producing approximately 12.4 million metric tons per annum (Mtpa) in the aggregate, or approximately 658 billion cubic feet of natural gas per year, one additional LNG storage tank, one additional berth and other associated facilities.
Energía Costa Azul is located on Mexico’s Pacific coast approximately 15 kilometers north of Ensenada, Baja California. The proposed liquefaction project will be constructed adjacent to the existing facilities on property owned by Energía Costa Azul within the La Jovita Energy hub, an area created in December 2014 by the state government and corresponding municipalities to promote the development of energy related infrastructure, including natural gas liquefaction process.
The key Mexican federal agencies involved in reviewing and permitting of liquefaction facilities at Energía Costa Azul include Mexico’s Safety, Energy and Environmental Agency (ASEA), the agency responsible for the regulation of industrial and operational safety as well as environmental protection in the hydrocarbons sector, the Energy Regulatory Commission (CRE) and the Department of Energy (SENER). Additional local permits from the State of Baja California and the City of Ensenada and other federal permits are also required prior to final investment decision.
In February 2015, Sempra LNG & Midstream, IEnova, and MGI Enterprises, a subsidiary of Pemex, entered into a Memorandum of Understanding (MOU) to collaborate in exploring the development of a natural gas liquefaction project at IEnova’s existing receipt and regasification terminal Energía Costa Azul. The MOU defines the basis for the parties to explore Pemex’s participation in this potential liquefaction project, including joining efforts on its development and structuring agreements that would allow opportunities for Pemex to become a customer, natural gas supplier and investor. Pemex has shared certain development costs as it continues to evaluate the project.
According to the most recent studies, expanding the existing terminal is expected to create approximately 5,000 to 6,000 direct jobs during construction, approximately 200 permanent full-time jobs during operations and several thousand indirect jobs. The project will also support local businesses in Baja California that provide products and services before, during and after construction.
What other benefits would be created by the addition of liquefaction facilities to the existing Energía Costa Azul receipt and regasification terminal?
With new proposed facilities, equipment and labor, the multi-billion dollar ECA Liquefaction Project would support economic growth and has the potential to generate hundreds of millions of dollars in economic development and new tax revenue.
Given the multiple natural gas interconnection points with U.S. cross-border pipelines and the ample capacity (existing and under-construction) able to supply the project, all options for gas supply are being explored.