In a lawsuit originally filed nearly six years ago by an adjacent landowner, a Mexican court last Thursday ordered a suspension of operations at Sempra Energy’s Energia Costa Azul liquefied natural gas (LNG) receiving terminal along the Pacific Coast of North Baja California, Mexico, pending a resolution of the dispute that Sempra officials originally characterized as common in Mexico (see Daily GPI, Jan. 28, 2005). 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 Monday 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 an adjacent landowner, Ramon Eugenio Sanchez Ritchie.

Sempra LNG CEO Darcel Hulse called the court action “egregious and irresponsible.” Hulse accused Sanchez Ritchie of trying to shake down Sempra.

“Right now we are viewing this as a property dispute, and one that doesn’t involve land on which the terminal operations are located,” the Sempra spokesperson said. It is not affecting operations, which since March have included a shipment of LNG from Indonesia every 12 days, the spokesperson said.

According to what the company has been told, a Mexican federal district court issued an order directing Mexican regulatory authorities to “provisionally suspend” authorizations for the operation of Sempra’s LNG terminal near Ensenada, Mexico, and about 60 miles south of the U.S.-Mexico border. The suspension would be effective until the legal proceedings with Sanchez Ritchie are resolved.

Five years ago, Sempra said, a Mexico City businessman went to court in North Baja, about 60 miles south of the international border, alleging that the U.S. energy company was using some of his property for the then-proposed LNG site — not the land it acquired earlier. At the time Sempra characterized the allegations as “without merit and factually defective,” noting the company was confident that it would prevail.

The disputed North Baja ownership surfaced in news media reports on both sides of the border in early 2005. At the time Sanchez Ritchie was described as an Ensenada lawyer who had filed a lawsuit in a Mexican state court in November 2004 after opposing Sempra’s LNG terminal plans for a long time with little success.

Sempra said it eventually purchased the disputed parcel and a second parcel collectively totaling 250 acres in 2006 after already having obtained all permits needed to construct and operate the $875 million, 1 Bcf/d capacity terminal, which began commercial operations in 2008. Although fully contracted Costa Azul remained mostly idle through the end of last year, but Sempra reported its first profitable period for its LNG operations late last year (see Daily GPI, March 1).

Regarding the court action, Sempra noted that none of its operating permits for the Costa Azul facility are conditioned on ownership of the disputed land parcel.

“Sanchez Ritchie has engaged in a long-running campaign, financed by others, to discredit Sempra,” Sempra LNG’s Hulse said. “He and his financial backers are misusing the judicial, political and regulatory processes of Mexico in an attempt to extract money from the company. We believe that Mexican authorities will see these efforts for what they are and overturn this egregious and irresponsible court action.”

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