First West Coast LNG-Receiving Terminal Prepares to Begin Operation

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Researched by Industrial Info Resources (Sugar Land, Texas)--Sempra LNG, a division of Sempra Energy (NYSE:SRE) (San Diego, California) is preparing to start up the Energia Costa Azul LNG-receiving terminal, which marks the first new LNG project on North America's West Coast. Royal Dutch Shell PLC (NYSE:RDS.A) (The Hague, The Netherlands) has a 20-year agreement for 50% capacity of the project. The terminal is located between Rosarito and Ensenada about 14 miles north Ensenada, Baja California, and 50 miles south of San Diego.

Energia Costa Azul will have a daily capacity of 1 billion cubic feet per day. The terminal has one ship berth and two 160,000-cubic-meter cryogenic tanks. It is connected to a 50-mile, 36-inch pipeline that will allow the terminal to provide natural gas to both Mexico and the United States. About 45% of the regasified natural gas will be for the Mexican market in places like Rosarito and Mexicali, and the remainder will sent to the U.S.

The cost of the entire project, including the pipeline, was approximately $875 million. Construction began in the first quarter of 2005. Each tank is 260 feet in diameter and stands 175 feet tall. The roof on the first tank was put in place in June 2006, and the second was installed about a month later. Each roof is 260 feet in diameter and weighs 529 tons. The roofs were raised by increasing the air pressure in the tanks to approximately 0.18 pounds per square inch and then welded into position.

Engineering, procurement and construction for the regasification terminal was handled by a consortium made up of Techint Mexico, Black & Veatch (Kansas City, Missouri), Mitsubishi Heavy Industries (Tokyo) and Vinci Construction Grands Projects (Paris). The contract for the terminal breakwater was awarded to a joint venture between Costain Group (London) and China Harbour (Beijing).

There are also preliminary talks of an expansion that could potentially increase the terminal's regasification capacity to 2.5 billion cubic feet per day. The terminal is expected to receive its first shipment of LNG from Asia in June.

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