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Oil report

Sempra still waiting for Mexican export permit for Costa Azul LNG

Aug 5 (Reuters) - U.S. energy company Sempra Energy said on Wednesday it continues to work with the Mexican government to get a 20-year export permit for the first phase of its proposed Costa Azul liquefied natural gas (LNG) export plant in Mexico.

The company, which made the announcement in its second quarter earnings statement, has said it planned to make a final investment decision (FID) in 2020 to build the plant.

Oil and gas companies around the world have pushed back decisions on building new LNG terminals as global demand for energy has collapsed due to the new coronavirus. Investment demand in LNG had been running high for several years due to heavier consumption from mostly Asian countries diversifying their generation mix away from coal.

The growth rate for LNG use, however, is slowing now and numerous planned projects have been put on the back burner.

In mid-2019, a dozen North American developers, including Sempra, said they planned to make FIDs by the end of the year. But none of those projects are under construction. All of those FIDs were delayed until 2020 or later.

At the start of 2020, another dozen developers - some from 2019 - said they planned to make FIDs by the end of this year. Currently, however, that total is down to four, and analysts said they expect only Costa Azul to actually go forward this year.

Sempra and Infraestructura Energética Nova SAB de CV (IEnova), its Mexican subsidiary, plan to build the export facility at the existing Costa Azul LNG import plant, which entered service in 2008.

In addition to the first phase at Costa Azul, Sempra, which owns part of the operating Cameron LNG plant in Louisiana, is developing other LNG export plants, including second phases at Cameron and Costa Azul and Port Arthur in Texas.

Reporting by Scott DiSavino; editing by Jonathan Oatis

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