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Fluor, Mexican Partner to Build Sempra LNG Plant Addition

In a move that has relevance for the viability of new liquefied natural gas (LNG) supplies in California, ICA Fluor, a U.S.-Mexico joint venture, announced Wednesday it has obtained a $100 million contract from Sempra Energy to build a key part of its Energia Costa Azul LNG receiving terminal that is set to open in the next quarter along the Pacific Coast of North Baja California, Mexico. ICA Fluor was tapped to build a nitrogen injection plant and an onsite electric generation facility within the existing Sempra LNG facility.

At an earnings conference call last month, Sempra CEO Donald Felsinger called the nitrogen unit a key investment that will allow a wider variety of LNG sources to come through the first West Coast receiving terminal and be eligible for delivery into California, which has adopted some of the most stringent gas quality requirements in the nation.

Felsinger characterized the nitrogen facility and related work as a strategic investment that will pay dividends in making the Costa Azul facility more viable in the increasing global competition for securing LNG shipments.

ICA Fluor said it will provide engineering, procurement, construction and start-up of the nitrogen injection plant following an estimated 22-month schedule. The facility will produce up to 18 MMcf/d of nitrogen. "The availability of the nitrogen injection process ensures that all the gas [processed through] the terminal conforms to North American standards," said ICA Fluor.

A related part of the work will involve the construction of a 26 MW electric generation facility to complement the existing power capacity at the LNG terminal site. ICA Fluor said the completed project will comply with what it called "stringent international emissions and environmental standards."

Noting that ICA Fluor had worked on Sempra's natural gas-fired electric generation plant at Mexicali, Director General Juan Carlos Santos said this latest project confirms the joint venture's "leadership in the LNG and power sectors in Mexico."

ICA Fluor was created by a combination of units from Mexico-based Empresas ICA and Irving, TX-based Fluor Corp.

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