El Sol newspaper from Tijuana: temporary closure of Sempra plant discourages investment

[Hans Laetz, Newsgroup Editor]

El Sol de Tijuana
February 16, 2011

Por Sonia Garcia Ochoa / translated by google

Tijuana .- The temporary closure of the LNG regasification plant in
Ensenada, Baja California gives a wrong signal to foreign investors in
2011 and put at risk their capital, because the process is not yet
over, offering an overview of legal uncertainty and state of law in
the state.

Furthermore, the only authority in the country that could order the
temporary closure of the company's regasification facilities is the
Energy Regulatory Commission as long as they pose a serious threat to
people or property.

Since the LNG terminal not only provides additional natural gas to
Baja California region but also provides a new alternative supply to
California and the western United States, said yesterday Dr. Alejandro
Diaz Bautista, national researcher of the National Council of Science
and Technology (CONACYT).

He said the problem of partial closure of the plant with the dispute
between the municipal government of Ensenada and the state government
of Baja California, gives bad signals to prospective investors in the
state and undermines the legal certainty for private investment Baja
California.

A few weeks ago, members of the full State Legislature passed a point
of agreement to be carried out an investigation and take action if
irregularities exist in the power plant.

The State Government, supported by the Energy Regulatory Commission at
the federal level, reopened the natural gas plant Energia Costa Azul,
the U.S. subsidiary of Sempra Energy, after the city of Ensenada
temporarily shut down the company's facilities.

The actions taken in Ensenada, in recent days, which resulted in the
temporary closure of the power plant LNG supplier, is having an impact
that endangers the economic and energy of the inhabitants of the
region of Baja California.

"It's important to remember that the structure of property rights and
laws in a market economy, affects the way in which the factors are
allocated and used," he said.

With the legal protection of these rights and laws, it ensures the
efficient use of productive resources and economic growth in an
economy such as Baja California.

As should be for all actions, both legislative and executive, to
provide greater certainty, stability and welfare of Baja California.

The Energia Costa Azul plant is a receiving terminal, storage and
regasification liquefied natural gas (LNG), located on the coast of
Baja California, 25 miles north of Ensenada and represents an
investment in the state of at least 975 billion.

Energía Costa Azul receive liquefied natural gas vessels from Russia,
Indonesia and Qatar, it is downloaded and stored in two tanks with a
capacity of 160,000 cubic meters each.

The gas in turn is regasified and sent to market through a new
pipeline from 72.42 kilometers (45 miles) connected to existing
pipelines in the area.

The terminal has an initial capacity of processing one billion cubic
feet per day of natural gas, with potential for expansion as market
demand in Baja California.

Natural gas is used mainly by power plants and various industries in
the region in Baja California and California.

The plant is the main supplier of natural gas for the Thermoelectric
Complex President Juarez and Mexicali combined-cycle power, which
provide power to Baja California.

Supplies natural gas to power generating facilities of the CFE in Baja
California, for what is considered strategic in the state and that any
damage to its operation would affect the electricity supply to
households and users in the state.