Sempra Energy and Mitsui & Co. Ltd. have signed a memorandum of understanding (MOU) for development of the Cameron LNG Phase 2 project in Louisiana and a future expansion of the Energía Costa Azul (ECA) LNG project in Baja California, Mexico.
The MOU contemplates the continued mutual support for the development of Cameron LNG Phase 2, including Mitsui's purchase of up to one-third of the available capacity of the project, as well as the potential offtake of 1 million tonnes/year of LNG and equity participation in a future expansion of ECA LNG (OGJ Online, Nov. 5, 2018).
ECA LNG is being developed with IEnova, Sempra's subsidiary in Mexico. Phase 1 includes one liquefaction train with an export capacity of 2.4 million tpy. ECA LNG future expansion would include additional trains with an expected export capacity of 12 million tpy.
Train 1 of the Cameron LNG Phase 1 project started commercial operations in August. Trains 2 and 3 are expected to begin LNG production in the first quarter and second quarter of 2020, respectively. Cameron LNG Phase 2, which has all necessary permits from the Federal Energy Regulatory Commission, encompasses up two additional liquefaction trains and up to two additional LNG storage tanks. Mitsui is also an equity owner of Cameron LNG, LLC, the development company for Cameron LNG Phase 1 and Phase 2.
In November, Sempra LNG and Mitsui entered into a heads of agreement and are currently working to negotiate and finalize a definitive 20-yr LNG sales-and-purchase agreement for the potential purchase of 0.8 million tpy of LNG from the ECA LNG Phase 1 project.
Development of Sempra Energy's LNG export projects is contingent upon obtaining binding customer commitments, completing the required commercial agreements, securing all necessary permits, obtaining financing and reaching final investment decisions, among other factors. In addition, the ability to successfully complete construction projects, such as the Cameron LNG export project, is subject to a number of risk and uncertainties.