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Sempra LNG plant in Ensenada at center of showdown
State authorities challenge Ensenada mayor's bid to close import terminal

By Sandra Dibble and Onell R. Soto | SDUT
February 11, 2011 at 8:38 p.m.

Liquefied natural gas is allowed to warm and turn back into gas at the LNG Energia Costa Azul plant in Baja California, Mexico.

Ensenada, BC Mexico - A Mexican natural gas import terminal was the site of a showdown Friday between Ensenada's mayor and Baja California officials.

Ensenada Mayor Enrique Pelayo Torres ordered the Sempra Energia Costa Azul LNG plant shut down Friday afternoon saying there were "irregularities and flagrant violations to the law."

Municipal authorities put seals on the plant gates, but state officials stepped in to keep it operating, witnesses said.

"The plant has not been shut down," said Kathleen Teora, a Sempra spokeswoman. “Due to the quick response of the state and federal authorities in Mexico, the egregious actions of the mayor of Ensenada were rightfully thwarted."

The plant supplies natural gas from Russia, Indonesia and Qatar to users on both sides of the border, including large power plants.

The plant has been at the heart of allegations of corruption for years. Its owner, Sempra Energy, has denied those allegations.

Sempra is the parent company of San Diego Gas & Electric, which operates independently of the natural gas import terminal.

The plant's operation has permits from federal, state and municipal officials, said Baja California's Economic Development Secretary, Alejandro Mungaray Lagarda.

"The Sempra plant is operating legally," he said in a statement.

He chided the attempted closure of the plant and said the state would go to federal court "with the aim of ensuring the rule of law and punishing those responsible."

The head of Ensenada's business sector, Hector Contreras Luenga, denounced he city's move.

"This is very unfortunate for those of us who are interested in promoting business in Baja California," he said.

In his statement, Mayor Pelayo said that land-use permits were improperly issued, the plant is not adequately insured and Sempra hasn't told emergency officials how the plant works or how it was built.

"Municipal authorities don't have plans for roads, pipelines and other infrastructure inside the plant's area," he said.

He also said that the plant doesn't have a properly equipped emergency response center.

And he said construction of the plant has caused environmental damage on land and in the ocean.

Pelayo criticized a former mayor, Jorge Antonio Catalán Sosa, saying he improperly approved construction of the plant.

Pelayo belongs to the PRI, the Institutional Revolutionary Party. Catalán was a member of PAN, the National Action Party.

Rivalry between the two parties has been intensifying as Mexico prepares for presidential elections next year. The two parties are bitter political opponents. The PAN currently controls the Baja California and federal governments.

Sempra has been battling allegations of wrongdoing surrounding the plant in Mexican and U.S. courts.

A man who says the company wrongly took his land won a court ruling finding the company in the wrong, but a later ruling set that aside.

At the same time, a former Mexican manager has accused the company of bribing officials and of wrongly spending money on a conference center near the plant.

Sempra denies doing anything wrong, and says the allegations are thinly veiled extortion attempts.


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One of the local rumors I am hearing is that previous municipal administrations of the PAN party gave Sempra a free walk on this one with little economic benefit to Ensenada, reportedly thanks to some under the table campaign donations. The new president municipal of the PRI party wants to get Sempra to pay or walk...

Makes sense. God knows there's a huge revenue stream available from this operation. At the end of the day, if Sempra has to fork over money to Ensenada, they'll just do what they always do and tack the extra costs onto the price for their customers.