Regional LNG: Sempra may expand LNG terminal in Baja: Report

Although construction of Sempra Energy's liquefied natural gas terminal in Baja California is in its earliest stages, the company says it eventually plans to expand the facility, The San Diego Union-Tribune reported Saturday.

?We're designing the terminal so it could be expanded from 1 billion cubic feet a day up to 2.5 billion cubic feet a day,? Sempra spokesman Doug Kline said.

The US$800 million project on 400 acres of the Costa Azul plateau about 14 miles north of Ensenada will process liquefied natural gas from Indonesia in an agreement with BP and Tangguh LNG. The company also has signed a capacity sharing agreement with Shell and its partners to bring the liquefied gas from Sakhalin Island off Russia's eastern coast.

Regasified natural gas from the project will be sold, mainly to electricity power plants, in northern Mexico and Southern California.

Sempra Global president Mark Snell told a Reuters news service reporter this week that the San Diego company has offered to share the project's capacity with other companies, including Chevron.

Kline said the news service story was incorrect in implying that Chevron is abandoning its project at the Coronado Islands in favor of using the Sempra facility.

?It's been overblown somewhat,? Kline said, as the report caused ripples in liquefied natural gas business around the country.

Numerous global energy firms are competing to introduce foreign supplies of natural gas to North America's West Coast. Sempra leads at least five other companies, but Chevron is a close second with a $650 million project off the coast of the Coronado Islands.

Chevron spokeswoman Nicole Hudson said the company has received all three key permits needed from the Mexican government and plans to proceed with its project.

?We're continuing with our funding and engineering and design work, which we expect to complete by the end of the year,? Hudson said.

Sempra's Kline said Snell was speaking in general terms.

?We've talked to all the companies developing down there so that they know that if we expand we'll have capacity to sell,? he said.

Expansion of the Costa Azul project is something that Sempra is considering in the future, Kline said. ?But we have not made any filings (with the Mexican government) to expand the terminal or anything like that.? (*)