Energía Costa Azul is an $875 million project to build an LNG receipt terminal along the coast, about 14 miles north of Ensenada. LNG ships will be able to dock off the coast and unload LNG supplies, which would be stored in onshore tanks. The gas processed by this terminal will be used by electricity generating plants and diverse industries in the region via a new 45-mile gas pipeline which will be interconnected with gas pipelines already existing in the area. The project will have an initial capacity to process 1 billion cubic feet per day of natural gas, with room for expansion as market demands dictate.

Baja California, Mexico has a growing need for energy, yet currently obtains all its natural gas supplies from the United States. The United States, meanwhile, is facing higher energy demands and dwindling supplies, which is placing an upward pressure on prices.

The project will not only supply additional natural gas to northern Mexico, it will also provide a new supply alternative to California and the West, where an increasing imbalance between supply and demand has led to rapidly escalating natural gas prices and electric rates beginning in 2002.