Sempra Eyes LNG Terminal in North Baja 
Throwing its hat in the ring with a number of U.S. energy giants such as El Paso Corp. and Chevron, San Diego-based Sempra Energy is pursuing a proposal for an on- or offshore liquefied natural gas (LNG) receiving terminal along the Pacific coast of northern Baja somewhere in a 70-mile strip south of the U.S. border. The proposed project would be financed by a consortium that would include Mexican interests, as well as Sempra. A formal announcement about the project is expected to come later in the month, according to Sempra officials. 
Both a land-based and floating terminal are being considered, according to Sempra's CEO Stephen Baum, whose company already has proposals to build a 600-MW power plant at Mexicali and a 212-mile natural gas pipeline from the Arizona-California border through northern Baja to serve power plants along the way and south of the border city of Tijuana. The estimated cost of the LNG receiving terminal is $350 million. 
Mexican officials reportedly are expecting to have one or two LNG facilities built in Baja in the years to come. The strong interest in LNG among U.S. and European energy giants is prompted by natural gas price spikes in the past 12 and the prospects for prices staying at the $3.50-$4/MM-Btu level. 
Baum said Sempra has concluded that the long-term prospect for gas prices staying around the $4 level is good enough to make an LNG project financially viable. A number of industry analysts are skeptical citing the risk and the siting/permitting hurdles that developers will face even in Mexico, let alone in California, as some proponents have suggested. 
Because of its geographic proximity and number of successful projects permitted by the Mexican government, Sempra is expected to have a leg up on competition, and Baum and other Sempra officials are betting on that edge holding up. 
Although none of the participants are still around, a part of Sempra's Southern California Gas Co. utility in the late 1970s pursued an LNG receiving terminal along the southern California coast west of Santa Barbara. That project was to bring in the equivalent of 500 MMcf/d gas in the form of LNG from Indonesia through a joint venture of affiliates of SoCalGas and Pacific Gas & Electric Co. 
Even with special state legislation to streamline the permitting process for the controversial receiving terminal, the project died from lack of permitting approvals, seismic concerns and ultimately changing economics that killed the project. Utility ratepayers ultimately paid millions of dollars for the aborted project in the early 1980s. During the same period, parts of El Paso had a disastrous experience with plans to bring in LNG from Algeria and other areas to the U.S. Gulf of Mexico coast.