Mexico’s Energia Costa Azul terminal to import LNG cargo after first export shipment

Sempra Infrastructure's Energia Costa Azul terminal is expected to import an LNG cargo from Indonesia in late July, just weeks after the project on Mexico's Pacific Coast began exporting the superchilled fuel, S&P Global Commodities at Sea data showed July 13.

The tanker, the Tangguh Sago, loaded at the Tangguh LNG terminal in Indonesia on July 7, the same day ECA exported its first cargo, CAS data showed. The Sempra subsidiary has a long-term contract with the Indonesian producer for 3.7 million metric tons/year of LNG to supply the regasification facility in Baja California, which runs from 2009 through 2029.

The cargo on the Tangguh Sago, scheduled to arrive July 27, likely relates to the import contract rather than commissioning work at the export facilities, according to S&P Global Energy CERA analysts.

ECA remains an important source of storage for the pipeline-constrained Baja California and Southern California gas markets, CERA gas analyst Alexis Morales said. The stored gas can be withdrawn during emergencies such as severe weather events or in periods of peak demand, which typically occur during the summer months.

"This operational flexibility likely reinforces the value of maintaining LNG imports at the facility despite its growing role as an export terminal," Morales said.

As a single-train export terminal, ECA will be able to produce about 3.25 million mt/year of LNG when fully online. Sempra expects the project to reach substantial completion this summer and begin commercial operations shortly after. The project is Mexico's second LNG project to come online and the first on the country's West Coast.

Import facility

The regasification facility can process about 1 billion cubic feet of gas per day. It has two storage tanks with about 320,000 cubic meters of combined storage capacity.

The SPA allows the LNG supplier to divert LNG cargoes from ECA for a fee, and actual deliveries to the plant in recent years have been significantly lower than the maximum amount provided under contract.

ECA imported one cargo in March, one in all of 2025 and eight in 2024, according to CERA data.

The facility generates revenue from fees under a firm storage and nitrogen injection service agreement with Shell, which expires in May 2028 and allows Shell to use up to 36% of the terminal's capacity, according to a February filing by Sempra with US financial regulators.

The remaining capacity is available for Sempra Infrastructure's use, and it devotes a portion of its capacity to satisfy its SPA obligation, according to the filing. But the export project will be the sole user of the capacity after 2029.

A US-based market analyst said gas demand in Baja California can be volatile during the summer and that cargoes may need to be imported from time to time to meet that demand.

ECA sources feedgas from the US via the Gasoducto Rosarito pipeline, and deliveries have remained at a trickle since the facility exported its first cargo earlier this month.

TotalEnergies, which has a 16.6% stake in ECA, lifted the first cargo and will be the sole offtake of LNG from the project during the ramp-up phase.

The French energy giant has a 20-year offtake deal for 1.7 million mt/year from ECA, which is also backed by another 20-year contract with Japan's Mitsui for 800,000 mt/year.

Sempra Infrastructure is also developing an expansion of ECA that would add about 12 million mt/year of liquefaction capacity. The expansion project has yet to reach a final investment decision.

The initial project began producing LNG in early June, and regional spot prices have so far shown a muted response.

Platts, part of S&P Global, assessed the spot price for gas delivered to Mexico at Gasoducto Rosarito at $2.06/million British thermal units on July 10, a decline of 10.5 cents/MMBtu day over day and down from over $3/MMBtu in mid-June.

Spot prices at the SoCal Gas hub were trading around $2.365/MMBtu on July 13, according to Platts' preliminary price assessments, after also topping $3/MMBtu in mid-June.

The start of exports from ECA, meanwhile, offer a new source of supply for Pacific Basin markets grappling with ongoing supply disruptions caused by the war in the Middle East.

The conflict is keeping global LNG spot prices elevated and volatile.

Platts assessed the August JKM benchmark price reflecting LNG delivered to Northeast Asia at $18.526/MMBtu on July 13, an increase of 65.9 cents/MMBtu from the previous assessment but still about 73% higher than prewar levels.