Having invested more than $650 million in Mexico since 1997, Sempra Energy International is looking to continue developments to keep pace with the 8-10% annual energy growth expected in Baja, Mexico over the next ten years.

“This means power demand (in Baja) will double in 10 years,” said Don Felsinger, group president of Sempra’s merchant energy companies, in an internal report to employees last month. “The region needs new power plants, and these plants also will require an increased supply of reliable natural gas to fuel them. Our energy projects in Mexico are designed to provide much-needed electricity and natural gas and our projects exceed all environmental and safety standards.”

With a power plant set to come on line near Mexicali later this year, the North Baja gas pipeline bringing gas from the California-Arizona border to the region, and a number of local natural gas distribution systems being built in Baja and other areas of northern Mexico, Sempra is building on a business relationship that dates back to the mid-1980s when its San Diego Gas and Electric Co. utility started trading electricity with Mexico’s government-run power system.

Being headquartered close to the Mexican border in San Diego, Sempra responded aggressively when the Mexican government began to open up energy development to private firms in the past five or six years. It has worked with Mexican business partners to gain government approvals for its projects and now has 350 full-time employees working on projects south of the border.

“Baja California has no natural energy resources, and it is not linked to the natural gas or electricity systems of mainland Mexico,” Felsinger said. “All that translates to more business opportunities for experienced energy companies.”

Emphasizing that Sempra is adhering to more stringent U.S. environmental standards in its Baja projects, Felsinger said that Sempra’s infrastructure projects will help stimulate economic growth on both sides of the U.S.-Mexico border, and in particular will give Baja residents an alternative to more polluting fuel oil-fired electric generation.

Sempra’s plans for a liquefied natural gas (LNG) terminal north of Ensenada along the Pacific Coast are currently being reviewed by Mexico’s national energy and environmental regulatory bodies. A ruling from the two federal agencies — Energy Regulatory Commission (CRE) and Environmental Authority (SEMARNAT) — is expected by mid-year, Felsinger said.

The Baja LNG field is littered with solid competition with up to a half-dozen proposals on the table from other U. S. companies, but Sempra is stressing it has the “best option” because of its 350-acre, industrial-zoned site and its “solid experience” with a half-dozen other projects in Mexico.

“Baja has no natural supplies of energy,” Felsinger said. “LNG offers diversity of supply, and natural gas is a clean-burning fuel that can reduce overall emissions and improve air quality as it replaces diesel fuel, oil and other heavy fuels currently used in the region.”

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