San Diego-based Sempra Energy late last week became the second company to apply to the Mexican federal energy agency for approval to build a $600 million liquefied natural gas (LNG) receiving terminal and related facilities on the Pacific Coast of North Baja, but the enthusiasm for the project may have been dampened somewhat by reports that contracts for its prime source of LNG in Bolivia are still not in place.

Sempra Energy International and its partners made an application without a news announcement, noting through a Sempra spokesperson in San Diego Monday that company officials are anticipating a lot of applications to develop LNG terminals in North Baja, but the real news won’t happen until the Mexican government gives one or more of the applicants approval to proceed with construction plans. While there is no specific timetable, Sempra thinks the federal regulatory commission in Mexico City wants to make a decision in the next 90 to 120 days, the Sempra spokesperson said.

The same day, South American business news sources carried reports that a “highly placed executive” with the marketing consortium Pacific LNG, with which Sempra has a deal for supplies, was on the verge of suing the Bolivian government for stalling on a decision of whether to build a natural gas pipeline to the proposed coastal liquefaction facility through neighboring Peru or Chile, both of which share a border with land-locked Bolivia.

Sempra’s San Diego spokesperson would not comment on the status of the negotiations with the Bolivians, nor would he speculate on whether a collapse of the talks with Bolivia would impact the development of the North Baja receiving facilities. “There are lots of potential sources of LNG for the terminal,” the spokesperson added.

According to the South American news reports, Pacific LNG’s legal action would be based on its existing contract to market the Bolivian gas. Peru recently proposed a pipeline route, but Pacific LNG reportedly favors a pipeline through Chile to the Chilean port of Patillos and has begun study of the design and construction of that route.

Meanwhile, Sempra Energy International has a detailed memorandum of understanding (MOU) or “letter of intent” to purchase the Costa Azul coastal site from private owners in Mexico. The site is located about 14 miles north of Ensenada, Sempra officials said. The site is supposedly isolated from existing residential and commercial areas along the North Baja coast. Sempra is supposed to build and operate the terminal on a joint venture basis with Michigan-based CMS Energy, which operates the largest LNG terminal in the United States at Lake Charles, LA.

When CMS and Sempra announced their joint plans late last year, they tied the terminal to prospective supplies in Bolivia. Earlier last month affiliates of Marathon Oil filed the first LNG application in Mexico as part of plans to build a massive energy center that would include an electric generating plant and other facilities.

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