A Memorandum of Understanding (MoU) has been agreed upon by Sempra Energy and Mitsui & Co. LTD. (Mitsui). This will showcase the agreement of the two parties for the participation of Mitsui in the Cameron LNG Phase 2 project in Louisiana and the expectation of the Energia Costa Azul (ECA) LNG project to expand in Baja California, Mexico.
“This agreement signals continued momentum in the growing U.S. liquefied natural gas (LNG) export market, while reinforcing the unique competitive advantage that Sempra offers customers seeking LNG export capabilities from the Gulf Coast, as well as the West Coast of North America,” said Justin Bird, president of Sempra LNG. “We are pleased to expand our relationship with Mitsui and advance the development of both LNG projects.”
“We are pleased to further expand our strategic relationship with Sempra in a broader range of opportunities. This agreement will contribute to expanding Mitsui’s uniquely diversified supply portfolio worldwide by utilizing the strengths and capabilities of both companies,” said Motoyasu Nozaki, managing officer, chief operating officer of Energy Business Unit II, Mitsui & Co., Ltd.
For the development of the Cameron LNG Phase 2, the MoU is non binding and is contemplating for the continued mutual support. This includes the purchase of Mitsui of up to one third of the capacity that is available for the project. Also, the offtake of about 1 million tonnes annually of LNG and equal participation in the future expectations of the ECA LNG.
IEnova that is the subsidiary of Sempra is developing the ECA LNG. One liquefaction train which has an export capacity of about 2.4Mtpa comprises the Phase 1 of the project. The future expansion of the ECA LNG will include additional trains with an estimated export capacity of about 12 Mtpa.
In August 2019 the commercial operations of the train 1 of the Cameron LNG Phase 1 project started. In the first and the second quarter of 2020, the LNG production by Trains 2 and 3 are estimated to begin. Two liquefaction trains and up to two additional LNG storage tanks are encompassed in the Cameron LNG Phase 2 that has all the important permits from the Federal Energy Regulatory Commission. The Cameron LNG, LLC is owned by Mistsui. It is the company that has developed Cameron LNG Phase 1and Phase 2.
Sempra LNG and Mitsui entered into agreement last November and are presently working for negotiations and finalizing a definitive 20 year LNG sales and purchase agreement for 0.8 Mtpa of LNG’s possible purchase from the project of ECA LNG Phase 1.
The LNG export project of the Sempra Energy is committed to obtain customer commitment, to complete the needs commercial agreement, to get all the required permits, to get funding and to come to final decisions about investment along with other factors. Apart from these, the construction project of such projects like the Cameron LNG export project involves a lot of risk and uncertainties.