Marathon Confirms It Plans Baja Facility

Eyeing an attractive market for gas and electricity in California and northwest Mexico, Marathon Oil Co. formally joined the ranks of major energy companies seeking to build natural gas installations in Baja California.

At a meeting with Wall Street securities analysts last week, the Houston-based concern confirmed a Times report that it had secured a site in Playas de Tijuana south of the U.S.-Mexico border. Its complex would include a liquid natural gas terminal, regasification and storage facilities, a pipeline to U.S. and Mexican markets, and a 400-megawatt electric power plant.

The company did not specify the total amount to be invested or the precise location, but sources involved in the deal said it is on the waterfront 15 miles south of the border, amid heavily populated residential areas favored by Tijuanans and U.S. visitors for weekend getaways.

Marathon’s partners include Pertamina, Indonesia’s state-owned energy company. Pertamina is the world’s largest producer of liquid natural gas and would become the project’s major supplier if built. Pertamina has aggressively sought to expand its liquid natural gas reach beyond the glutted Pacific Rim region.

In late January, Baja California Gov. Eugenio Elorduy Walther told The Times that Royal Dutch/Shell also had acquired rights to oceanfront property about 60 miles south of the border for a liquid natural gas terminal. Shell has so far declined to comment on the project, reportedly to be located south of the Bajamar golf resort.

Last year, Sempra Energy of San Diego and El Paso Corp. of Houston each unveiled proposals to build waterfront liquid natural gas facilities to meet the expanding regional demand for fuel to operate a host of new natural gas-fired electric power plants planned or under construction in Mexico and California.

The Mexican government has yet to approve any of the proposals, which face stiff opposition from local residents. Aiming to gain local favor, Marathon said its proposal could include a waste-water treatment facility and a water desalination plant to help with pressing local infrastructure needs.