Sempra Energy said on March 24 it will go forward this year with plans to sanction an LNG export plant in Mexico, but may push back a decision on a separate Texas plant.
A final investment decision will come in the second quarter for its Costa Azul LNG plant, a one-quarter delay to its earlier schedule. However, Sempra will no longer commit to a third-quarter decision on its Port Arthur LNG project, officials said in a conference call.
“The current economic environment may impact the schedule,” said Justin Bird, president of Sempra LNG. The company remains confident in the long-term demand for LNG and has commitments for about 70% of the Texas project’s output, he said.
Investment decisions on other LNG projects are being stalled as global demand for gas is falling because of the coronavirus outbreak.
Last month, Sempra had said it planned to make a final investment decisions on Costa Azul in Baja California in the first quarter and on Port Arthur in Texas in the third quarter.
At Costa Azul, Sempra has non-binding 20-year agreements with units of France’s Total SA as well as Japan’s Mitsui & Co. and Tokyo Gas Co. Ltd. to buy about 0.8 million tonnes per annum (MTPA) of LNG each.
The first phase of Costa Azul is designed to have one liquefaction train that can produce about 2.4 MTPA or 0.32 billion cubic feet per day (Bcf/d) of natural gas.
The Costa Azul export plant will be built at the existing site of its LNG import plant, which entered service in 2008 and has the capacity to regasify up to 1 Bcf/d.
Crude oil production in the U.S. climbed 100,000 bbl/d to a record 12.2 million bbl/d, after hovering around 12 million and 12.1 million bbl/d since mid-February, according to EIA data.
Under a deal with the government the 70-km (44-mile) pipe will have capacity for 950 million cubic feet of gas per day from fields operated by Noble and will be ready in first-quarter 2021.
Leonid Mikhelson, the head of Russia's Novatek said on Jan. 25 that LNG from the United States as its chief threat, Interfax news agency reported.