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TC Energy eyes compression boost to serve Mexican LNG export project


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TC Energy eyes compression boost to serve Mexican LNG export project

TC Energy Corp. proposed to increase compression in Arizona on its North Baja Pipeline LLC system to add 495,000 Dth/d of firm gas delivery to the U.S.-Mexico border to serve an LNG export terminal planned for Mexico's Pacific Coast.

According to a Dec. 16 application with the Federal Energy Regulatory Commission, the North Baja XPress project would involve installing about 31,900 horsepower of gas compression at an existing compressor station in La Paz County, Ariz., and modifications to meter stations in La Paz County and Imperial County, Calif.

North Baja, owned by TC PipeLines LP, operates a bidirectional pipeline from Ehrenberg, Ariz., to the international border between Yuma, Ariz., and North Baja, Mexico. There the pipeline connects with Infraestructura Energetica Nova SAB de CV's Gasoducto Rosarito system to serve demand in Baja California, Mexico, and Imperial and San Diego counties in California.

North Baja said that while the Energia Costa Azul regasification terminal of Infraestructura Energetica Nova SAB de CV, or IEnova, in Baja California and subsequent modifications allowed south-to-north gas flows on its system, the demand for LNG imports has diminished. North-to-south flows now predominate, the company said.

"The upgrades and modifications [of the new project] ... will create capacity to provide transportation of feedgas for [Sempra Energy] and IEnova's proposed ECA LNG export plant" at the existing import terminal, as well as providing more gas supply to meet growing market demand, according to the application. (FERC docket CP20-27)

North Baja is asking for certificate approval of the $127.2 million North Baja XPress project by Dec. 31, 2020. It emphasized that impacts to landowners or communities are limited as the project is designed to take advantage of North Baja's existing infrastructure and footprint.

The company executed a binding precedent agreement for 20 years for the full project capacity with a project shipper but has kept the buyer confidential in the application.

As for the Energia Costa Azul LNG export project, IEnova signed a heads of agreement in November 2018 for the full export capacity of phase one.

On Oct. 24, IEnova said it would delay final investment decision on the LNG export project until the first quarter of 2020 as the company irons out details of the engineering, procurement and construction bidding process and its off-take contract as well as permitting from Mexican regulators. Phase one is expected to produce 2.4 million tonnes per annum on entering service in 2023. Future Energia Costa Azul LNG expansions would add more trains, which could push total export capacity to 12 mtpa.

Natural gas for the Energia Costa Azul LNG export project will likely come from either the Permian or San Juan basins.

Maya Weber and John Hilfiker are reporters with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.