Shell announced it closed a 20-year deal to buy liquid natural gas (500 cmpd) at Sempra Energy?s terminal, which is under construction now.
The Energia Costa Azul terminal, which will be located on the western coast of Baja California, Mexico, is expected to come into play in 2008.
The agreement gives Shell International Gas Ltd. the right to purchase half of the terminal's initial daily capacity of 1 billion cubic feet and half of any capacity additions if the terminal is expanded.
Under the current agreement, Shell receives half the capacity of the facility and Sempra will own, construct and operate the terminal. Sempra expects to sign construction contracts later this year.
Shell will ship liquid natural gas supplies from the Sakhalin II project in eastern Russia to the Sempra terminal. The Shell agreement comes on the heels of a supply deal that Sempra Energy LNG announced this week for the other half of the terminal's 1 billion cubic feet per day capacity.
