Costa Azul LNG Terminal in Mexico to Begin Operation in March 2008

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Researched by Industrial Info Resources (Sugar Land, Texas)-- Sempra Energy's (NYSE:SRE) (San Diego, California) $945 million Costa Azul liquefied natural gas (LNG) terminal, Mexico's second LNG-receiving terminal, is expected to begin operation in March 2008. The terminal, which will have a capacity of 1 billion cubic feet per day, is located in Baja California, Mexico. The project includes the necessary piping, and the station will have two full-containment storage tanks and a ship berth with a separate breakwater. Upon completion, the terminal will raise Mexico's receiving capacity of imported LNG to up to 2 billion cubic feet per day, or 30% of the nation's production.

The Costa Azul terminal is fully owned by Sempra LNG, a subsidiary of Sempra Energy, which will provide the plant with 500 million cubic feet of natural gas per day (50% of the plant's capacity) for the next 20 years. The remaining half will be supplied by BP Mexico (Mexico City, Mexico) and its Tangguh LNG partners.

In 2005, the primary engineering, construction and procurement contract was awarded to Techint S.A. de C.V. (Mexico City), Black & Veatch (Kansas City, Missouri), Mitsubishi Heavy Industries (Tokyo, Japan) and Vinci Construction Grands Projets (Paris, France) for about $500 million. The construction contract for the project's breakwater was won by a joint venture formed by the Costain Group PLC (London) and China Harbour, one of China's largest construction groups.

The gas processed by this terminal, which will be brought in by LNG ships and stored in onshore tanks, will be transported though a 45-mile gas pipeline. More than half of the plant's natural gas production will be used by power generating plants from Mexico's Federal Electricity Commission and diverse industries in the area. The remaining production will be exported to California and southwestern U.S. gas markets. The additional gas supply is vital to Mexico because of the major industrial and commercial growth. Costa Azul will empower the region, since it is the first LNG terminal in Baja California, an area that has always had a gas infrastructure isolated from the rest of Mexico's energy supply and has always depended on gas supplies from the U.S.

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