A federal district court hearing in Mexico on Tuesday is expected to clarify — but not resolve — a bitter legal dispute to determine whether Sempra Energy’s liquefied natural gas (LNG) facility sited along the North Baja California Pacific Coast may continue to operate, or whether a landowner who is seeking 250 acres adjacent to the site prevails.

A separate court proceeding is scheduled between Sempra and the plaintiff on July 28, which may resolve the issue, but that is not certain, officials said.

Sempra is alleging that Ramon Eugenio Sanchez Ritchie, who claims the right to the adjacent land, has a cozy relationship with Mexican district court Judge Andre Nalda Jose Neals, who has been instrumental in Sanchez Ritchie’s legal pleading. Sempra claims the court proceeding is designed as a shake down for an eventual pay off.

In court documents Sanchez Ritchie alleges that Sempra acquired his land illegally and is therefore in violation of its permits to operate the LNG terminal.

The judge on June 17 granted a provisional suspension order to close the Sempra facility (see NGI, June 28). However, Sempra appealed and an appeals court is set to consider that proceeding on Tuesday (July 5).

Sempra explained on its website that the case in which Sanchez Ritchie has filed is an “amparo,” a procedure under Mexican law by which a plaintiff asks a court to order the government to take some action. “Here, Mr. Sanchez Ritchie’s amparo asks the court to order the governmental authorities to revoke the permits issued to the Costa Azul LNG terminal,” Sempra noted.

Separate from the appeal, the amparo is to be addressed by the district court on July 28. In the meantime, Sanchez Ritchie has asked the court to order Mexican authorities to “provisionally suspend” the LNG terminal operating permits, even before it decides the merits of the amparo.

Sempra has distributed a translation of research information from a Mexican source (El Informador de BC), which alleges that Sanchez Ritchie and the judge involved in the June 17 ruling have been involved in legal matters going back to Oct. 16, 2001, when the same judge ordered Sanchez Ritchie released from a jail where he was being held on charges of committing fraud.

Earlier this year the judge allegedly ordered Sanchez Ritchie released from any liability related to some legal proceedings filed against him.

While Sanchez Ritchie’s Los Angeles-based spokesperson contends that this is misrepresentation of the facts by Sempra, the U.S. energy company is just as adamant that it will prevail.

“We believe that Mr. Sanchez Ritchie and his financial backers are misusing the judicial, political and regulatory processes of Mexico in an attempt to extract money from our company, and we are confident that the Mexican authorities ultimately will see these efforts for what they are,” a Sempra spokesperson said.

In the July 28 hearing, the court could grant Sanchez Ritchie’s request, which in turn would result in the LNG facility’s permits being revoked. The court also could deny the amparo, said Sempra. Either way, both parties would have the right to appeal.

“Sempra LNG, unlike Mr. Sanchez Ritchie, purchased the land from the titleholders of the land and has recorded its title to the land,” Sempra stated. “Mr. Sanchez Ritchie never purchased the land and instead seeks to assert an ownership claim by virtue of squatting on the property.”

A spokesperson for Sanchez Ritchie said the June 17 order “shall become permanent shortly.” All Sempra has done is file a grievance in a separate court, and that is technically not an appellate court, said the spokesperson. “Once again, they [Sempra] have misrepresented the facts to the public. The hearing on [July 6] will address the legality or illegality of the terminal; they say they don’t need a setback [buffer land], and we say they do.”

There has been no stoppage of operations at Sempra’s LNG facility, and the company reiterated again last week that the terminal “continues to operate in compliance with all permits.” The disputed adjacent land is not required to operate the LNG terminal, Sempra said.

Sempra said that it intends to “continue to vigorously defend its investment and protect its right to operate this important facility for the energy security of Mexico.”

Updates on the ongoing dispute will be posted at www.sempra.com.

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