North Baja Pipeline, a subsidiary that operates in Arizona and southern California, received a Federal Energy Regulatory Commission (FERC) expansion certificate on Oct. 2, 2007. The certificate authorizes modifications that would allow it to import natural gas from the Costa Azul liquefied natural gas (LNG) terminal nearing completion in northwestern Mexico.

The imported gas would serve markets in California and the U.S. Southwest.

The expansion certificate authorizes North Baja to import up to 2.7 billion cubic feet a day of gas into the U.S. from Mexico. North Baja will be the first U.S. pipeline on the West Coast to receive LNG-sourced supply. Phase I of the expansion, currently under construction, will provide initial import capacity of 600 MMcf/d.

When it was completed in 2002, North Baja was authorized to export roughly 500 million cubic feet a day into Mexico, primarily for use by electric generators. Construction of the Costa Azul LNG terminal provided North Baja a strategic opportunity to expand.

Phased Approach

The FERC certificate authorizes phased expansion of North Baja.

Phase 1 (confirmed):

• System modifications to allow for bi-directional flow.
• Addition of a short 36-inch lateral pipeline to interconnect with Southern California Gas Co. (a Sempra subsidiary) near Blythe, Calif.
• Will accommodate imports of roughly 600 MMcf/d while continuing to allow for exports to Mexico.
• Projected in-service date is January 2008.

Phase 2 (unconfirmed plans):

• Would dramatically expand the pipeline’s capacity via looping and compression.
• Is dependent on expansion of the Costa Azul LNG terminal or construction of another terminal in the vicinity.