Sempra awarded $1.4 billion gas contract
12 Jan 2005
Sempra LNG, a unit of Sempra Energy, has been awarded a 15-year natural gas supply contract by Mexico's state-owned electric utility, Comision Federal de Electricidad (CFE). The contract is estimated at $1.4 billion over its life and supports the CFE's future energy requirements in northern Baja California, including the Presidente Juarez power plant in Rosarito.
Beginning in 2008 and continuing through 2022, the agreement provides CFE with an average of about 130 million cubic feet per day (MMcf/d) of natural gas. Sempra anticipates fulfilling the contract using natural gas processed at its Energia Costa Azul liquefied natural gas (LNG) receipt terminal.
Energia Costa Azul is under development about 14 miles north of Ensenada, Baja California, and, when it is completed in 2008, will be the first LNG import facility on North America's West Coast capable of processing one billion cubic feet of gas per day.
The long-term CFE sales contract will consume more than one quarter of the 500 MMcf/d Sempra is procuring from Indonesia. On October 12, 2004, Sempra announced a supply agreement with BP and its Tangguh LNG partners for the supply of 3.7 million tonnes of LNG per year, (500 MMcf/day) from Indonesia to Energia Costa Azul.
"Securing a long-term CFE sales contract of this size demonstrates that there is strong demand for reliable, competitively priced natural gas in the Pacific Southwest region,'' said Mark Snell, group president of Sempra Global. "As the energy needs continue to grow in Baja California and the Southwestern United States, we anticipate many others will follow CFE's lead and tap the resources of the West Coast's first LNG facility.''
LNG is natural gas that has been cooled below minus 260 degrees Fahrenheit and condensed into a liquid. LNG occupies 600 times less space than in its gaseous state, which allows it to be shipped in cryogenic tankers from remote locations to markets where it is needed. At the receiving terminal, LNG is unloaded and stored until it can be vaporised back into natural gas and moved via pipeline to customers.
