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Sempra, IENova say export permit

is holding up FID on LNG project

PROJECTS & IENOVA, the Mexican subsidiary of Califor- government to take the permit that we are still
COMPANIES nia-based Sempra Energy, is still hoping to begin missing and we are confident that we are going to
work on the Energía Costa Azul LNG project get it,” he was quoted as saying by the San Diego
soon, even though it is still waiting for Mexico’s Union-Tribune. “This is very important for us
government to issue the export permit it needs and we are really optimistic about it.”
to take that step. Tania Ortiz Mena, the CEO of IEnova,
The company has been trying to meet all the sounded a similar note, saying that Mexican
requirements needed to take a final investment Energy Minister Rocio Nahle had “put a lot of
decision (FID) on the scheme, which provides for time” into reviewing the company’s application
its existing LNG import terminal near Ensenada for an export permit with a term of 20 years. “I
to be converted into an export facility. Earlier think we have answered all of their questions,
this year, though, it had to push the deadline for met all of their requirements,” she added.
the FID back from the first quarter to the second IEnova’s existing LNG import terminal began
quarter. operating in 2008 and is capable of regasifying
That deadline has now passed, and represent- up to 1bn cubic feet (28.32mn cubic metres) per
atives of IENova and its parent company indi- day of LNG. The company is now intending to
cated in a recent conference call with analysts that expand the facility so that it can serve as a gas liq-
they were not sure when they might be able to go uefaction and export complex. The facility’s first
ahead. The coronavirus (COVID-19) pandemic phase will be able to turn out 2.4mn tonnes per
has made further delays unavoidable, they said. year (tpy) of LNG, and its production capacity
They also stressed, though, that they were may eventually rise to 12mn tpy.
working to push the Energía Costa Azul LNG Sempra has already struck non-binding LNG
project forward by securing the export per- supply agreements with Total (France), Mitsui
mit. Carlos Ruiz Sacristán, the CEO of Sempra & Co. (Japan) and Tokyo Gas (Japan), each of
North American Infrastructure and the execu- which has signed a 20-year agreement to buy
tive chairman of IEnova, said that the company around 800,000 tpy of LNG from Energía Costa
had remained in communication with Mexican Azul LNG. These three agreements will allow
authorities about its plans. Sempra to export 100% of the output from the
“We’re working very close with the plant’s first phase.™

Total reduces stake in Tellurian

INVESTMENT FRANCE’S Total has scaled down its partici- LNG from Tellurian’s offtake volumes from the
pation in Tellurian and its proposed Driftwood Driftwood terminal. This is on top of 1mn tpy
LNG project on the Louisiana Gulf Coast. that Total had agreed to buy from the terminal
According to a regulatory filing made by the com- itself, for a total of 2.5mn tpy.
pany with the US Securities and Exchange Com- The French company’s participation illus-
mission (SEC) this week, Total has reduced its trates Tellurian’s innovative model, whereby the
stake in Tellurian to 17.4%, from 19% when it first company is trying to finance the $27.5bn Drift-
agreed to invest in the latter’s LNG project. Total wood LNG project by offering equity partici-
had said in an earlier filing that it would continue pation as well as the more conventional offtake
to sell Tellurian shares “from time to time”. agreements. The engineering, procurement and
A Total executive, Eric Festa, resigned from construction (EPC) contractor for Driftwood,
Tellurian’s board of directors on July 31, accord- Bechtel, also has equity participation in Tellu-
ing to the filing. Total said Festa’s resignation was rian, worth $50mn.
not a result of any disagreement between him However, Tellurian’s progress towards a
and Tellurian, its management, its board of direc- final investment decision (FID) on Driftwood
tors, or any committee of its board, but provided has been slowed by current market conditions.
no further details on the reason for the move. Nonetheless, the US company recently resumed
Total still holds 44.9mn shares in Tellurian, talks with India’s Petronet on a potential invest-
versus about 46mn in April 2019. The French ment in Driftwood after a previous memoran-
company agreed last year to invest $500mn in dum of understanding (MoU) expired in June.
Driftwood Holdings, and also entered into a Reuters cited sources familiar with the mat-
definitive sales and purchase agreement (SPA) ter as saying the two companies now have until
for an additional 1.5mn tonnes per year (tpy) of December to finalise a deal.™

Week 31 07•August•2020 www. NEWSBASE .com P15