Citing increasing indications of declining gas supplies and increasing demand for the fuel in the continental United States, San Diego-based Sempra Energy last month told employees that its planned 2.5 Bcf liquefied natural gas (LNG) import facilities on the West and Gulf coasts are a big part of its future business strategy.

“Domestic natural gas production is declining while demand is increasing,” said CEO Steve Baum. “Imports will fill the growing gap. Now is the time for Sempra Energy to make its move.”

Sempra believes North American gas supplies have “peaked,” while the United States alone consumes more than 30% of the annual worldwide gas production.

Darcel Hulse, the head of Sempra’s international businesses, said the continuing preference for natural gas for firing electric generating plants provides a ready future market for LNG. New nuclear plants, expanded hydro-electric production and massive applications of renewable resources are not realistic options for meeting future power demand, Hulse emphasized to Sempra employees. “Gas has become the ‘fuel of choice’ when you look at the options,” he said.

Thus, Sempra is placing increased emphasis, Hulse said, on its planned LNG receiving terminal on the Pacific Coast of North Baja California, Mexico (Costa Azul LNG) and an existing receiving terminal near Lake Charles, LA, that it acquired earlier this year (Hackberry LNG).

“The two facilities would make up a significant part of the network that imports LNG into North American,” said Hulse. “And we will be strategically positioned with one facility on the West Coast and one on the Gulf Coast.”

Historically, separate parts of Sempra, which was formed five years ago by the merger of the holding companies for Southern California Gas Co. and San Diego Gas and Electric Co., were early proponents of LNG. SDG&E in 1965 developed an LNG storage facility south of San Diego that was closed in 1985 where piped in supplies of gas were liquefied for storage. And SoCalGas and affiliates seriously pursued the first West Coast (Lower 48) LNG receiving terminal along the California coast in the 1970s and early 1980s, but were eventually forced to abandon the plans due to environmental concerns, regulatory delays and ultimately deregulation of natural gas that greatly pushed down the price of gas.

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