Fueled by the abundance of liquefied natural gas (LNG) receiving terminal proposals in the northwest corner of Mexico, the North Baja Pipeline reported Thursday that its six-month open season for expanded future capacity drew interest totaling about 5.5 Bcf/d. The current pipeline running from the Arizona-California border through the northern end of Baja is fully subscribed for its 500 MMcf/d capacity.

From the level and type of interest reported by the subsidiaries of PG&E Gas Transmission Northwest and Sempra Energy International, the proposed LNG receiving terminals, along with new and proposed electric generation plants in Baja, California and Arizona are the primary drivers for the large level of interest expressed since the open season began last March 31.

“The results from the open season reflect North Baja’s ideal location for serving the newly developed terminals, and shippers’ interest in moving LNG to markets throughout Mexico and the United States,” said Peter Lund, PG&E Gas Transmission’s vice president, pipeline marketing/development, who committed the company to working with potential shippers to “keep this project moving forward.”

North Baja Pipeline provides LNG shippers with takeaway capacity to reach U. S. and north Mexico markets, and the pipeline’s operators said they will now work with interested shippers to design and size future expansion, targeting an April 2007 in-service date.

PG&E Gas Transmission is a joint owner of North Baja with two Sempra subsidiaries, Gasoducto Bajanorte and Transportadora de Gas Natural de Baja California. PG&E built and operates the 80-mile link of the pipeline from the Arizona border near Ehrenberg, AZ, to the U. S.-Mexican border, while Sempra subsidiaries built and operate the 140-mile segment paralleling the international border westerly across North Baja. (More details on the open season are available on the respective company web sites: www.pge-northbaja.com and www.gasoducto-bajanorte.com.)

In a speech at a Wall Street energy conference earlier in the week, Sempra CEO Steve Baum said the North Baja Pipeline can be easily doubled in capacity to 1 Bcf/d through added compression. Also, back-hauling gas to some new power plants in Arizona can free up capacity for the initial LNG supplies that land at what Sempra hopes will be its proposed Costa Azul receiving terminal between Tijuana and Ensenada along the Pacific Coast.

Sempra Energy Global Enterprises group president Donald Felsinger said the strong open season response is a further affirmation of the current common planning assumption in the industry, which Sempra has long agreed to, that North American natural gas reserves are declining and LNG imports will be needed before the end of this decade.

Potential shippers in the just-concluded open season were able to indicate interest for new interconnections to serve other markets, and identified included Sonora, Mexico, Yuma and Phoenix, AZ, and Topock and Blythe, along the California-Arizona border. Those interconnections equated to about 900 MMcf/d of added capacity, according to PG&E Gas Transmission.

©Copyright 2003 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.