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Sempra Energy and Mitsui sign LNG MoU

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LNG Industry,

Sempra Energy has announced that it has entered into a memorandum of understanding (MoU) with Mitsui & Co. Ltd reflecting the parties’ preliminary agreement for Mitsui’s participation in the Cameron LNG Phase 2 project in Louisiana, US, and a future expansion of the Energía Costa Azul (ECA) LNG project in Baja California, Mexico.

Justin Bird, President of Sempra LNG, said: “This agreement signals continued momentum in the growing US LNG export market, while reinforcing the unique competitive advantage that Sempra offers customers seeking LNG export capabilities from the Gulf Coast, as well as the West Coast of North America.

“We are pleased to expand our relationship with Mitsui and advance the development of both LNG projects.”

Motoyasu Nozaki, Managing Officer, Chief Operating Officer of Energy Business Unit II, Mitsui & Co. Ltd, added: “We are pleased to further expand our strategic relationship with Sempra in a broader range of opportunities. This agreement will contribute to expanding Mitsui's uniquely diversified supply portfolio worldwide by utilising the strengths and capabilities of both companies.”

According to the statement, the MoU is non-binding and contemplates the continued mutual support for the development of Cameron LNG Phase 2, including Mitsui’s purchase of up to one-third of the available capacity of the project, as well as the potential offtake of approximately 1 million tpy of LNG and equity participation in a future expansion of ECA LNG.

ECA LNG is being developed with IEnova – Sempra’s subsidiary in Mexico. Phase 1 of the project includes one liquefaction train with an export capacity of approximately 2.4 million tpy. ECA LNG future expansion would include additional trains with an expected export capacity of approximately 12 million tpy.

Train 1 of the Cameron LNG Phase 1 project started commercial operations in August this year. It is expected that Trains 2 and 3 will begin LNG production in 1Q20 and 2Q20, respectively. Sempra claims that Cameron LNG Phase 2 has all necessary permits from the Federal Energy Regulatory Commission (FERC), and encompasses up to two additional liquefaction trains and up to two additional LNG storage tanks. Mitsui is also an equity owner of Cameron LNG, LLC – the development company for Cameron LNG Phase 1 and Phase 2.

In November 2018, Sempra LNG claims that it entered into a heads of agreement (HoA) with Mitsui, with both parties currently working to negotiate and finalise a definitive 20-year LNG sales-and-purchase agreement for the potential purchase of 0.8 million tpy of LNG from the ECA LNG Phase 1 project.

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