Sempra Energy Announces FID For Landmark Energía Costa Azul LNG Export Project

SAN DIEGO, Nov. 17, 2020 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today announced that its subsidiary ECA Liquefaction (ECA LNG), a joint venture between Sempra LNG and Infraestructura Energética Nova, S.A.B. de C.V. (IEnova), has reached a final investment decision (FID) for the development, construction and operation of the ECA LNG Phase 1 natural gas liquefaction-export project in Baja California, Mexico. ECA LNG Phase 1 is currently the only liquefied natural gas (LNG) export project in the world to reach FID in 2020.

"We are excited to continue to help unlock North America's energy potential with ECA LNG Phase 1. This project would be the first LNG export facility on the Pacific Coast of North America that can help connect abundant natural gas supplies from Texas and the Western U.S. directly to markets in Mexico and countries across the Pacific Basin," said Justin Bird, CEO of Sempra LNG. "This important milestone is a testament to the resiliency of our team and marks the latest step toward our goal to be North America's premier LNG infrastructure company."

Estimated capital expenditures for ECA LNG Phase 1 are approximately $2 billion. Sempra expects to fund the project with a combination of equity contributions and debt. First LNG production from ECA LNG Phase 1 is expected in late 2024. 

"As one of the largest private investments in the history of Baja California, ECA LNG's liquefaction-export project is expected to help support the Mexican economy through investment, tax revenue and jobs," said Tania Ortiz Mena, CEO of IEnova. "The project is also expected to positively impact the local community through social investment programs as well as help position Mexico as a key player in the global trade of natural gas."

ECA LNG Phase 1 will be built and operated by Sempra LNG and IEnova, Sempra Energy's subsidiary in Mexico, as a single-train liquefaction facility with a nameplate capacity of 3.25 million tonnes per annum (Mtpa) of LNG and an initial offtake capacity of approximately 2.5 Mtpa of LNG. 

Exports of LNG from ECA LNG Phase 1 are expected to improve the trade balances of the U.S. and Mexico. Its construction is expected to create more than 10,000 direct and indirect jobs as a result of increased economic activity and social investments in both countries. Approximately 75 full-time jobs are expected to be added to the operations of ECA LNG.

ECA LNG has secured definitive 20-year sale and purchase agreements with Mitsui & Co., Ltd. and an affiliate of Total SE for the purchase of approximately 2.5 Mtpa of LNG from Phase 1 of the project. Additionally, ECA LNG and Total SE continue to work toward a potential equity investment in the project by Total SE. 

In February, ECA LNG executed a lump-sum, turn-key engineering, procurement and construction contract with an affiliate of TechnipFMC plc for Phase 1 of the LNG export facility.

Sempra LNG is developing additional LNG export facilities on the Gulf Coast and Pacific Coast of North America, including a potential Phase 2 of the ECA LNG project. The successful development and ultimate construction of both phases of ECA LNG's project and Sempra Energy's other LNG export projects are subject to a number of risks and uncertainties and there can be no assurance that these projects will be completed.

About Sempra LNG
Sempra LNG's mission is to be North America's premier LNG infrastructure company by providing sustainable, safe and reliable access to U.S. natural gas for global markets. Sempra LNG owns a 50.2% interest in Cameron LNG, a 12 Mtpa export facility operating in Hackberry, Louisiana and is currently developing additional LNG export facilities on the Gulf Coast and Pacific Coast of North America through Cameron LNG expansion, Port Arthur LNG in Texas and Energía Costa Azul LNG in Mexico. Through its disciplined value creation process, Sempra LNG evaluates expansion opportunities at each of these locations and other infrastructure investments along the LNG value chain.  

About IEnova
IEnova develops, builds and operates energy infrastructure in Mexico. As of the end of 2019, the company has 1,300 employees and approximately US$9.6 billion in total assets, making it one of the largest private energy companies in the country. IEnova was the first energy infrastructure company to be listed on the Mexican Stock Exchange.  

This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions with respect to the future, involve risks and uncertainties, and are not guarantees. Future results may differ materially from those expressed in the forward-looking statements. These forward-looking statements represent our estimates and assumptions only as of the date of this press release. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors.

In this press release, forward-looking statements can be identified by words such as "believes," "expects," "anticipates," "plans," "estimates," "projects," "forecasts," "should," "could," "would," "will," "confident," "may," "can," "potential," "possible," "proposed," "target," "pursue," "outlook," "maintain," or similar expressions, or when we discuss our guidance, strategy, goals, vision, mission, opportunities, projections or intentions.

Factors, among others, that could cause our actual results and future actions to differ materially from those described in any forward-looking statements include risks and uncertainties relating to: decisions, investigations, regulations, issuances of permits and other authorizations, and other actions by (i) the U.S. Department of Energy and other regulatory and governmental bodies and (ii) states, counties, cities and other jurisdictions in the U.S., Mexico and other countries in which we operate or do business; the success of business development efforts, construction projects and major acquisitions and divestitures, including risks in (i) the ability to make a final investment decision, (ii) completing construction projects on schedule and budget, (iii) the ability to realize anticipated benefits from any of these efforts once completed, and (iv) obtaining the consent of partners; the impact of the COVID-19 pandemic on our (i) ability to commence and complete capital and other projects and obtain regulatory approvals, (ii) supply chain and current and prospective counterparties, contractors, customers, employees and partners, (iii) liquidity, resulting from bill payment challenges experienced by our customers, decreased stability and accessibility of the capital markets and other factors, and (iv) ability to sustain operations and satisfy compliance requirements due to social distancing measures or if employee absenteeism were to increase significantly; the resolution of civil and criminal litigation, regulatory inquiries, investigations and proceedings, and arbitrations; actions by credit rating agencies to downgrade our credit ratings or to place those ratings on negative outlook and our ability to borrow at favorable interest rates; moves to reduce or eliminate reliance on natural gas and the impact of the extreme volatility of oil prices on our businesses and development projects; weather, natural disasters, accidents, equipment failures, computer system outages and other events that disrupt our operations, damage our facilities and systems, cause the release of harmful materials, cause fires and subject us to liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance (including costs in excess of applicable policy limits), may be disputed by insurers or may impact our ability to obtain satisfactory levels of affordable insurance; cybersecurity threats to storage and pipeline infrastructure, the information and systems used to operate our businesses, and the confidentiality of our proprietary information and the personal information of our customers and employees; expropriation of assets, the failure of foreign governments and state-owned entities to honor the terms of contracts, and property disputes; volatility in foreign currency exchange, interest and inflation rates and commodity prices and our ability to effectively hedge the risk of such volatility; changes in tax and trade policies, laws and regulations, including tariffs and revisions to or replacement of international trade agreements, such as the United States-Mexico-Canada Agreement, that may increase our costs or impair our ability to resolve trade disputes; and other uncertainties, some of which may be difficult to predict and are beyond our control.

These risks and uncertainties are further discussed in the reports that Sempra Energy has filed with the U.S. Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC's website, www.sec.gov, and on the company's website at www.sempra.com. Investors should not rely unduly on any forward-looking statements.

Sempra LNG, Cameron LNG, Port Arthur LNG and ECA LNG are not the same company as San Diego Gas & Electric (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra LNG, Cameron LNG, Port Arthur LNG and ECA LNG are not regulated by the California Public Utilities Commission.

SOURCE Sempra LNG

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