Mexico’s move early in the month to take back site leases from Marathon Oil Corp.’s proposed liquefied natural gas (LNG) receiving terminal location along the North Baja Pacific Coast did not create any concerns for Sempra Energy’s similar project.

Sempra owns the land at its Costa Azul site for its joint venture LNG project with Royal Dutch Shell subsidiaries.

“Our project is properly zoned, and we have a letter of support from the local government regarding the land use,” said Georgina Garcia, a spokesperson for Sempra’s Global Enterprises business unit. She said the Energia Costa Azul site complies with all of the local land-use requirements from the city of Ensenada. (Marathon’s problems arose with a different local government tied to the border city of Tijuana.)

“We don’t expect to encounter any of those problems,” said a Shell LNG project spokesperson in Mexico.

Citing surprise and disgust, a Marathon spokesperson indicated last Monday the company would be dropping its plans to build a LNG receiving facility and related energy center complex — the Tijuana Regional Energy Center — on a site north of the Sempra-Shell location, following the local government’s decision to take back the land leases. “It is obviously a sign that the government will not support the project, and as such, it is clear that the Tijuana energy center will not be built” (see Daily GPI, March 2).

Marathon obtained the first Mexican federal government certificate to develop a LNG receiving terminal site, along with a larger complex that was to include a 1,200 MW electric generation plant, a 20 million-gallon seawater desalinization plant, and wastewater treatment facility — all tied together in an environmentally friendly sustainable design. The proposal, however, was still lacking a federal environmental permit and local government approvals. Marathon had expected to obtain those early this year and have a LNG terminal in operation in 2006.

Meanwhile, Sempra hopes to lock up LNG supplies through BP and the Indonesian government and have construction at its joint-venture site underway by the end of this year or early next, with the first shipments of LNG to arrive in 2007.

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