With the state’s governor saying natural gas needs to play a key energy role, the California State Lands Commission (CSLC), which in April dumped on a proposed offshore liquefied natural gas (LNG) terminal, recently gave its approval to a proposed expansion of the North Baja Pipeline to enhance the state’s ability to receive some of the supplies starting next year at Sempra Energy’s Costa Azul LNG receiving terminal along the Pacific Coast of North Baja California, Mexico.

The expansion could boost capacity from the current 500 MMcf/d to 2.9 Bcf/d in the pipeline that serves both North Baja California and the Southwest.

The decision amends the Sempra North Baja Pipeline’s existing lease for bringing supplies across the U.S.-Mexico border. This will permit an additional 48-inch diameter pipeline within North Baja’s existing right-of-way, encompassing a three-phase expansion project between now and into 2009.

Technically, the CSLC was just dealing with the 1,035 feet of pipe crossing state-managed land, but it is a key decision for the 79.8-mile existing route that will get the extra pipeline alongside the existing one.

Gov. Arnold Schwarzenegger lauded the state panel, which is quasi-independent, for its approval of the pipeline expansion, noting it is “an important step for California because it provides a critical bridge fuel as we intensify our efforts to increase renewable energy.”

Schwarzenegger’s staffers said the governor thinks that the North Baja Pipeline will help facilitate the use of LNG from the Sempra receiving terminal 65 miles south of the California border. In essence the North Baja Pipeline allows Southern California to tap existing facilities to access a totally new source of gas, they said.

“California is committed to seeking out alternative fuel sources that are available and affordable for consumers,” Schwarzenegger said. “And by expanding our fuel supplies, Californians will benefit from lower overall prices, which is why LNG has a place in our state’s future energy portfolio. We need a diverse, dependable and environmentally sound mix of energy sources.”

The expansion covers the existing interstate gas pipeline transmission system between Ehrenberg, AZ, and the interconnection at the international border, covering the approximate 80-mile distance. The existing North Baja U.S. system and complementary Gasoducto Bajanorte pipeline were built in 2002. The expansion of North Baja was based on an open season last year that indicated “high shipper interest in additional processing capacity,” the state commission said in processing the application.

Pending regulatory approvals (10 federal, four state, and eight local) and successful commercial capacity contracts, the expanded line will be built and operable by early 2010, the state officials said.

©Copyright 2007Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.