A former owner of 250 acres adjacent to Sempra Energy’s liquefied natural gas (LNG) receiving terminal along the Pacific Coast in North Baja California, Mexico came out swinging Tuesday following a favorable Mexican federal district court decision last Thursday that ordered the Energia Costa Azul facility to be shut down, pending further legal proceedings.

A spokesperson for landowner Ramon Eugenio Sanchez Ritchie told NGI his client seeks to close the LNG facility and get his land back because Sempra allegedly committed fraud in developing the project and obtaining the adjacent land as a buffer. The lawsuit originally was filed nearly six years ago by Sanchez Ritchie.

A San Diego-based Sempra spokesperson said there were “other developments unfolding,” but for the present the company had nothing more to report other than that a current unloading of an LNG tanker shipment from Indonesia was expected to be concluded on Tuesday. A spokesperson for Sanchez Ritchie said the Mexican federal judge was granting the regulatory agencies in that country the time to act upon his order.

“If the authorities fail to enforce the order pursuant to the Mexican court order’s terms and conditions, then such conduct should raise questions about whether or not Sempra is engaging in undue influence over the rule of law once again.”

A Mexican court last Thursday ordered a suspension of operations at Sempra LNG’s terminal, pending a resolution of the dispute that Sempra officials originally characterized as common in Mexico (see Daily GPI, June 22). However, since Sempra has not been officially notified by the court, it is continuing operations as usual, a Sempra LNG spokesperson told NGI Monday.

San Diego-based Sempra said the company learned of the court action last Friday, but it has been unable to obtain any documents related to the ruling. Company officials said the court action came “without notice or an opportunity to be heard,” despite the fact that the LNG operator has been engaged in a long-standing dispute with the adjacent landowner.

Through a Los Angeles-based spokesperson who talked with NGI Tuesday, Sanchez Ritchie accused Sempra of allegedly continuing “to misrepresent itself to the public, its stakeholders and the analysts in the marketplace.” He disputes that the San Diego-based energy company had legal permits in 2003 because it only acquired the Sanchez Ritchie adjacent land in 2006 and one of the permit requirements was to have the buffer zone land in place to satisfy a condition of the Mexican federal permitting process requirements.

“Second, Sempra has stated that [it] purchased the property under Mexican laws, however, [it] acquired the property from a deceased seller using a two-year-old extinguished power of attorney,” Sanchez Ritchie said. The spokesperson said Sempra illegally removed Sanchez Ritchie from his property using what he alleged was a “sham purchase contract.”

In the summer of 2003 Sempra was reported to have LNG permits in hand for projects in both Mexico and Louisiana, giving it “first mover advantage” among the four or five serious proposals competing at the time to site LNG receiving terminals along the Pacific Coast of North Baja California, based on a third-party report released by Credit Suisse First Boston (CSFB). Success of the LNG ventures was viewed as a means for Sempra to diversify its earnings, which then were centered on its two cash-cow utility companies (see Daily GPI, Aug. 21, 2003).

CSFB’s rosy appraisal, however, was tempered with the reminder that Sempra still needed to resolve a perceived lack of deliverability of the Baja gas into U.S. markets due to pipeline constraints. “Discussion with the CSFB Mexico research team suggests need for natural gas in Mexico, although the U.S. is a more liquid market to achieve a contract and financing,” said CSFB analyst Curt Launer.

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