U.S. energy company Sempra Energy said on Nov. 17 its ECA Liquefaction subsidiary will build the Costa Azul LNG export plant in Mexico, the only LNG export project in the world to get a final investment decision (FID) in 2020.
On Nov. 13, Mexico President Andres Manuel Lopez Obrador said the government would give the project an export permit as long as the company helped to offset an oversupply of gas in the area.
Sempra had been waiting for the 20-year export permit all year. It was in part held up by the novel coronavirus.
ECA Liquefaction is a joint venture between Sempra’s Sempra LNG and Sempra’s Mexico subsidiary, Infraestructura Energética Nova SAB de CV (IEnova).
ECA Liquefaction will build the plant at the existing Costa Azul LNG import plant at an estimated capital cost of around $2 billion. It is expected to produce first LNG in late 2024.
The export plant, which will have a nameplate capacity to produce about 3.25 million tonnes per annum (MTPA) of LNG, already has 20-year agreements with units of Mitsui & Co. Ltd. and Total SE for the purchase of about 2.5 MTPA from the project’s first phase.
Costa Azul’s Pacific Coast location gives it an advantage over competing U.S. Gulf Coast export plants because it is closer to growing Asian markets. U.S. plants usually ship LNG to Asia through the Panama Canal.
Investment demand for LNG ran high for several years due to heavy consumption from mostly Asian countries to meet rising energy demand and diversify fuel sources away from dirty coal and oil.
This year, however, oil and gas companies around the world pushed back decisions on new LNG terminals after the coronavirus caused global energy demand and prices to collapse.
Recommended Reading
Brazos Completes Permian G&P Plant, Announces Another
2024-08-15 - Privately held Brazos Midstream completed a 200 MMcf/d cryogenic gas processing plant in the Midland Basin and plans to build a larger gas processing plant in the second half of 2025.
Analysts: Midstream MLPs Outperforming S&P in 2024
2024-08-14 - The midstream sector has been able to take advantage as capex spending slows and cash flows increase.
Tallgrass Gets $843MM Investment from Canadian Pension Plan
2024-08-13 - The Canada Pension Plan Investment Board is investing in private midstream company Tallgrass Energy, which has assets in 14 U.S. states.
Wilson: NGLs are America’s Other Energy Export Boom
2024-08-12 - Robust outlook, interested buyers, willing investors—what’s not to like as NGLs have become America's hottest export product?
EnLink Expects Matterhorn Line Operational by September
2024-08-07 - EnLink’s JV partners cited the effects from Hurricane Beryl causing slight delays in the Matterhorn Express Pipeline.