Page 14 - GLNG Week 46

GLNG COMMENTARY GLNG

The new natural gas
liquefaction plant and
export terminal will be
built at the site of an
existing LNG import
facility.

gas imported from the US Permian basin to turn an alternative to pipelines that lead to the Gulf
out as much as 12mn tpy of LNG. Coast or other US destinations.
If these projects succeed, their investors will
be able to export LNG at relatively low rates. Spreading overseas
This is largely because the route across the Finally, the FID on ECA LNG represents an
Pacific Ocean from Mexico’s western coast is advance for Sempra, as it marks an expansion
shorter than the routes used by US Gulf Coast of the company’s LNG business beyond the US.
producers, which must transport their LNG Sempra currently has one operational export ter-
through the Panama Canal in order to reach the minal in the US and has a further one planned.
Pacific. As such, ECA LNG and MPL hope to Sempra owns a 50.2% interest in Cameron
drum up business by offering fuel at competitive LNG on the Louisiana Gulf Coast, which began
prices. commercial operations in August 2019. The
facility consists of three liquefaction trains,
Economic benefits which came online one after another over the
The success of the projects could, in turn, give a subsequent year, and has a total capacity of
significant boost to the Mexican economy. 12mn tpy. Illustrating the importance of Asian
On the one hand, they could raise the coun- LNG buyers, most of the other partners in Cam-
try’s profile on global gas markets. On the other eron are Japanese companies – Mitsui & Co.,
hand, ECA LNG is keen on revenue generation Mitsubishi and NYK Line – with France’s Total
and job creation, and it is reasonable to assume also participating. The FID on ECA
that MPL has similar goals. Meanwhile, Sempra has also proposed to
According to Sempra’s statement, the pro- build the Port Arthur LNG terminal on the LNG represents
posed export terminal will deliver on both Texas Gulf Coast. The first phase of that facility an advance
counts. “Exports of LNG from ECA LNG Phase would consist of two liquefaction trains, with a
1 are expected to improve the trade balances of maximum combined capacity of 13.5mn tpy. for Sempra,
the US and Mexico,” the company said. “Its con- Port Arthur is one of a number of LNG pro-
struction is expected to create more than 10,000 jects that were delayed earlier this year as a result as it marks an
direct and indirect jobs as a result of increased of the coronavirus (COVID-19) pandemic and
economic activity and social investments in subsequent market downturn. Sempra said in expansion of the
both countries. Approximately 75 full-time jobs May that an FID on the facility was now antici- company’s LNG
are expected to be added to the operations of pated sometime in 2021.
ECA LNG.” In a further blow, state-owned Saudi Aramco business beyond
At the same time, the Pacific LNG export pro- said in September that it would review an earlier
jects also have the potential to benefit gas pro- non-binding decision to buy a 25% interest in the US.
ducers in the Permian basin, which straddles Port Arthur, thought to be worth billions of dol-
Texas and New Mexico. MPL has suggested that lars. Sempra has not commented on what this
as Mexico receives more US-produced gas via means for the project, especially since the deal
the recently finished Wahalajara pipeline net- with Aramco also involves off-take from Port
work, it could direct excess volumes of this gas Arthur. And the review does not guarantee that
to the liquefaction plants for export. This option Aramco would back out, but it certainly appears
would help Permian operators by giving them to complicate the path towards an FID.™

P14 www. NEWSBASE .com Week 46 20•November•2020