Although it was still operating as usual on Friday, Sempra Energy’s liquefied natural gas (LNG) receiving terminal along the Pacific Coast of North Baja California in Mexico was facing a clouded future after a Mexican federal court issued apparent support for a long-standing lawsuit by a former landowner.

Encouraged by the court ruling, a former owner of 250 acres adjacent to Sempra’s receiving terminal came out swinging last Tuesday, leveling various allegations and charges of misconduct at the LNG operator. A spokesperson for landowner Ramon Eugenio Sanchez Ritchie told NGI his client seeks to close the LNG facility and get his land back because Sempra allegedly committed fraud in developing the project and obtaining the adjacent land as a buffer. The lawsuit was originally filed by Ritchie nearly six years ago.

On June 17 the court ordered a suspension of operations at Sempra LNG’s Energia Costa Azul receiving terminal, pending a resolution of the dispute.

San Diego-based Sempra said it learned of the court action June 18, but 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 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.

After the latest LNG shipment was completed last Tuesday, a spokesperson for Sanchez Ritchie said the Mexican federal judge was granting the regulatory agencies in that country the time to act upon his order. “If the authorities fail to enforce the order pursuant to the Mexican court order’s terms and conditions, then such conduct should raise questions about whether or not Sempra is engaging in undue influence over the rule of law once again.”

Sanchez Ritchie said through a spokesperson that the court decision was a victory in his battle against the company to get back 250 acres on the northern side of the LNG site and that he had “uncovered transgressions” by the plant operator that have allowed it to operate “out of regulatory compliance” in Mexican law.

Sempra LNG has been involved in a dispute with Sanchez Ritchie dating back to June 2006 regarding its possession of the property. “We believe the ultimate goal of Sanchez Ritchie and those who are providing financial backing for his efforts, is not to keep the property, but to extract money from the company by disrupting its operations,” the Sempra LNG spokesperson said.

Sanchez Ritchie alleges that the company’s LNG permits require it to use the adjacent land for the natural gas plant operations. Sempra denies the allegation. “The property was purchased after relevant permits were issued, and Sempra LNG has fully complied with all environmental laws and regulations, and continue operations in full compliance with its permits,” the spokesperson said.

Nevertheless, Sanchez Ritchie said last Thursday the plant could be shut down in the coming days “because the [Mexican] federal judge has signaled that there are significant irregularities and irresponsible actions, such as the cancellation of the plant’s ‘area set-back cushion’ and a pipeline filled with high-pressure nitrogen and natural gas running three meters from the property limits of my property.”

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.

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.”

Sanchez Ritchie’s spokesperson told NGI that Sempra continued “to misrepresent itself to the public, its stakeholders and the analysts in the marketplace.” He disputes that the San Diego-based energy company had legal permits in 2003 because it only acquired the Sanchez Ritchie adjacent land in 2006 and one of the permit requirements was to have the buffer zone land in place to satisfy a condition of the Mexican federal permitting process requirements.

“Second, Sempra has stated that [it] purchased the property under Mexican laws, however, [it] acquired the property from a deceased seller using a two-year-old extinguished power of attorney,” Sanchez Ritchie said. The spokesperson said Sempra illegally removed Sanchez Ritchie from his property using what he alleged was a “sham purchase contract.”

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