Second LNG facility gains permit in Baja California

ChevronTexaco has cleared a major environmental hurdle to build a Liqified Natural Gas terminal in Baja California, which could help California meet its energy needs:

Natural gas already fuels about one-third of California's fleet of power plants, but most supplies are imported through pipelines from distant fields in Canada, the Rocky Mountains and the Southwest. Growing demand for fuel threatens to boost electricity and heating prices, especially since the ability to boost production from existing sources remains in question.

Big energy companies are scrambling to fill the gap with LNG: natural gas produced overseas that must be chilled and pressurized for shipping in huge ocean tankers. ChevronTexaco is developing Gorgon, a large natural gas field in southwestern Australia, and is seeking to line up markets for its output. Gorgon LNG will serve markets on the West Coast, China and elsewhere in Asia, Hodgson said.

Plans for ChevronTexaco's Baja LNG terminal call for the import of about 1.4 billion cubic feet of natural gas a day, roughly equal to one-fifth of California's current demand. A joint venture of Sempra Energy, a San Diego-based utility holding company, and Shell Oil wants to build a $600-million terminal near Ensenada that could handle 1 billion cubic feet a day.

Yet Natural Gas Week is reporting that, "Mexico's Comision Federal de Electricidad (CFE) has issued a gas purchase tender for 235 MMcf/d mainly to supply the Presidente Juarez power plant south of Tijuana." If Mexico starts building native demand for Natural Gas, then the supplies available to California from Mexican LNG terminals will be restricted.