San Diego’s Sempra Energy has announced a new business unit, Sempra Infrastructure Partners, to focus on developing North American liquefied natural gas (LNG) export infrastructure, natural gas infrastructure and renewable energy generation.
A non-controlling position in the new business unit is to be sold off to finance the project pipeline.
One such project is Energía Costa Azul, an LNG export project in Ensenada, Baja California, that was recently sanctioned by the Mexican government.
Sempra has been waiting almost a year for one final permit to come through from the Mexican government. President Andrés Manuel López Obrador (AMLO) announced recently that the permit will be granted, but only if Sempra helps Mexico to export excess gas that was purchased under the previous administration but is not needed as AMLO prefers to burn cheap and dirty fuel oil.
Importantly, this project will become the first LNG export facility on the Pacific coast of North America. This provides a route for US gas from the Gulf of Mexico to reach East Asian nations, without having to go through the Panama Canal – reducing cost and cutting the shipping time in half.
A Mexican energy infrastructure specialist commented, “This project has taken several years to consolidate and since inception it has faced opposition from the local Ensenada population.”
“This project has taken several years to consolidate and since inception it has faced opposition from the local Ensenada population.”
Energy infrastructure specialist, Mexico
One specific bone of contention was the environmental impact assessment, the same source explained, “A team of marine experts was brought in to relocate marine resources away from the construction areas so that the environmental impact statement (MIA) could be approved.”
It seems as though the opposition has magically died away though, the infrastructure specialist continued, “Now the project is accompanied by a broad portfolio of social investment, aimed at defusing this opposition. The local people seem happier.”
An executive at an energy company operating in Mexico observed, “What is interesting is the company’s ability to operate; its main success was to get Costa Azul into AMLO’s infrastructure plan. Being in that plan offers some protection because all the projects were approved by the President himself.”
“What is interesting is the company’s ability to operate; its main success was to get Costa Azul into AMLO’s infrastructure plan.”
Executive of an energy business, Mexico
Sempra maintains a broad investment portfolio in different areas of the energy sector. It has suffered previously from the uncertainty created by the governments position towards the private sector, but this project suggests an improved relationship that opens doors for future projects in Mexico.