The Energía Costa Azul (ECA) liquefied natural gas (LNG) export project in Mexico’s Baja California is still set for a final investment decision this quarter pending the receipt of an export approval, Infraestructura Energética Nova (IEnova) executives said during a first quarter earnings call.

While saying that the “core of the business model remains the same,” IEnova CEO Tania Ortiz admitted that some projects and capital spending might be delayed this year, while permitting in Mexico, including the request for the LNG export permit, has slowed because of the pandemic.

“Overall this [ECA] is a project that is very beneficial to Mexico and I believe the administration is aware of that… But we are seeing disruptions because of the current situation.”

The ECA project, the first of its kind in the country, will import U.S. gas as feedstock and includes a $400 million pipeline on the Mexico side of the border. Last year, ECA received U.S. Department of Energy authorizations to export U.S.-produced natural gas to Mexico and then re-export it globally.

The proposed two-phase ECA liquefaction project, a joint venture between San Diego-based Sempra Energy subsidiaries IEnova and Sempra LNG, would be built adjacent to Sempra’s existing ECA LNG receipt terminal near the city of Ensenada. The target market is East Asia.

An engineering, procurement, and construction agreement with TechnipFMC plc is in place and the company expects to give notice to proceed this quarter.

“The only thing not in our control is the export permit,” Executive Chairman Carlos Ruiz said.

In late 2018, ECA signed heads of agreement (HOA) with Total SA, Mitsui & Co. Ltd. and Tokyo Gas Co. Ltd. to take capacity from Phase 1 of the proposed project. The three companies each potentially could purchase 0.8 million metric tons/year (mmty) from Phase 1.

Ortiz said planned gross investment is about $1.9 billion. She added that she does not foresee problems in natural gas supply given upstream spending cuts and expected declines in U.S. gas production due to demand destruction caused by the pandemic.

“Mexico is the natural market for U.S. gas. We are the most competitive market where U.S. gas can arrive.” She added that she thinks Mexico would be “one of the last markets to be impacted.”

Ortiz did say that some industrial customers receiving gas in Mexico have indicated they are facing slowdowns due to the economic impacts of the coronavirus shutdown, and that IEnova wants to “work together with our customers through this hard time.”

IEnova’s 510 MMcf/d Guaymas-El Oro pipeline remains in force majeure as conflicts with Yaqui indigenous communities continue.

Ortiz did not provide a timeline for the pipe’s return to commercial operations, but said that with the local communities in isolation because of the coronavirus, weekly discussions with the government have been put on hold.

IEnova reported profit of $46 million (3 cents/share) in the first quarter, compared with $101 million (7 cents) in the same period of 2019.

In related news, Kinder Morgan Inc.’s Sierrita Gas Pipeline LLC expansion project, which extends from the U.S. border near Sasabe, AZ into Mexico, was placed in service on April 12, adding yet more cross-border capacity to the gas system.

The expansion increases the pipeline’s capacity by approximately 323,000 Dth/d to 524,000 Dth/d, and consists of a new 15,900 horsepower compressor station in Pima County, Arizona. Kinder Morgan is a 35% owner and the operator of Sierrita Gas Pipeline.