Sempra Energy and Total SA have signed a memorandum of understanding to cooperate in the development of North American LNG export projects. The scope of MOU covers continuing the development of the Cameron LNG liquefaction-export project in Louisiana and Energía Costa Azul (ECA) liquefaction-export project in Baja California, Mexico.
The MOU contemplates Total potentially contracting for as much as 9 million tonnes/year of LNG offtake across Sempra Energy’s LNG export development projects on the US Gulf Coast and West Coast of North America, specifically Cameron LNG Phase 2 and ECA LNG. Total—already a partner of Cameron LNG with a 16.6% stake—also may acquire an equity interest in ECA LNG.
“In large measure, the next step in fulfilling our country’s energy potential is the development of critical export infrastructure for LNG,” said Jeffrey W. Martin, chief executive officer of Sempra Energy. The company’s long-term goal is to develop more than 45 million tpy of LNG export capacity in North America.
Total Chairman and Chief Executive Officer Patrick Pouyanne said development of export capacity on the West Coast of Mexico “will benefit from synergies with existing infrastructure and from a significant shipping cost advantage for customers in Asia.”
The $10-billion Phase 1 of the Cameron LNG project includes three liquefaction trains with 14 million tpy of export capacity under construction in Louisiana. Commissioning of the first train is under way. All three trains are expected to be producing LNG in 2019. Phase 2, previously authorized by the US Federal Energy Regulatory Commission and being developed jointly by co-owners, encompasses up to two additional liquefaction trains and up to two additional LNG storage tanks with 9 million tpy of capacity.
ECA Phase 1 is a one-train facility with an expected total export capacity of 2.5 million tpy, utilizing the existing LNG receipt terminal’s tanks, loading arms, and berth. Phase 2 is expected to have additional export capacity of 12 million tpy of LNG. The project, in Baja California, will be supplied with gas from the US.
Development of LNG export facilities is subject to risks and uncertainties, including obtaining binding customer commitments, required regulatory approvals and permits, securing financing, completing the required commercial agreements and other factors, as well as reaching a final investment decision.
Participation by Total remains subject to finalization of definitive agreements, among other factors.