Sempra Energy Sees Costa Azul FID in Q4

Sempra Energy said November 5 it expects to take a final investment decision (FID) on the first phase of its Energia Costa Azul LNG project on Mexico's Pacific coast in the fourth quarter.

The first phase would include a single 3mn mt/yr liquefaction train, most of the output of which – about 2.5mn mt/yr – has been committed under 20-year sale-and-purchase agreements with Mitsui & Co and French Total. A second phase would add 12mn mt/yr of liquefaction capacity.

All that appears to be left before taking FID on the project – which will be built by Sempra LNG and Sempra Energy’s Mexican subsidiary IEnova – is to negotiate an export permit with the Mexican government.

In recent months, however, reports have surfaced that Mexican president Andres Manuel Lopez Obrador wants IEnova to commit to building a second liquefaction plant – perhaps in the Gulf of California port city of Topolobampo – as a condition of issuing an export permit for Costa Azul.

The FID aspirations for the $1.9bn project were included in Sempra Energy’s Q3 2020 financial report, in which it reported quarterly earnings of $351mn and adjusted earnings $380mn, down from $813mn and $425mn, respectively, in Q3 2019.