Washington — TC Energy is proposing to increase compression in Ehrenberg, Arizona, on its North Baja Pipeline to add 495,000 Dt/d of firm delivery to the US-Mexico border in order to serve an LNG export terminal planned for Mexico’s Pacific Coast.

According to an application filed with the Federal Energy Regulatory Commission, the North Baja XPress project involves installing about 31,900 hp of compression at an existing station in La Paz County, Arizona, and modifications to meter stations in La Paz and Imperial County, California.

North Baja, owned by TC Pipelines, operates a bi-directional pipeline from Ehrenberg to the international border between Yuma, Arizona, and North Baja, Mexico, where it connects with IEnova’s Gasoducto Rosarito to serve demand in Baja California, and Imperial and San Diego counties in California.

While the 2008 addition of IEnova’s Energia Costa Azul regasification terminal in Baja California and subsequent modifications allowed south-to-north flows, the demand for LNG imports has diminished, North Baja said, and north-to-south flows now predominate.

FEEDGAS

“The upgrades and modifications … will create capacity to provide transportation of feedgas for Sempra LNG and IEnova’s proposed ECA LNG export plant” located at the existing import terminal, as well as further providing gas supply to meet growing market demand, said the application filed Monday at FERC (CP20-27).

LNG sendout from Energia Costa Azul has averaged just 15 MMcf/d this year to date, slightly down from 2018, but is 63% lower than the five-year average, according to S&P Global Platts Analytics data.

North Baja is asking for certificate approval of the $127.2 million North Baja XPress project by December 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.

OFFTAKE AGREEMENTS

As for the ECA LNG export project, IEnova signed a heads of agreement in November 2018 with Total, Mitsui and Tokyo Gas for the full export capacity of Phase I.

On October 24, IEnova said it would delay final investment decision on ECA LNG until the first quarter of 2020, as the company worked to iron out details of the engineering, procurement and construction bidding process and its offtake contract, as well as permitting from Mexican regulators. Phase I is expected to produce 2.4 million mt/year upon entering service in 2023.

Future ECA LNG expansions would add more trains, which could push total export capacity to 12 million mt/year.

UPSTREAM SOURCES

Additional upstream capacity will need to be developed in either brownfield form on existing pipelines such as El Paso Natural Gas or Transwestern Pipeline. A final FID on the ECA LNG export project will likely follow securing upstream capacity commitments.

Separately, a greenfield project led by Magnum Energy Midstream called the Western Energy Storage & Transportation Header Project — or WEST Header — could provide new firm transport capacity stretching from as far north as Salt Lake City, Utah, down to Yuma, Arizona.

Magnum Energy’s website shows an anticipated in-service date by Summer 2021.

Natural gas for the ECA LNG export project will likely come from either the Permian or San Juan basins. However, the El Paso Gas Transmission pipeline would need to expand the South Mainline segment that parallels the US-Mexico border, which often hits capacity during peak demand periods.

Source: https://www.spglobal.com