The isolated docking facility known as Energia Costa Azul, 14 miles north of Ensenada, Mexico, is expected to serve as a major new source of natural gas for Mexico, as well as California, Arizona and other Western states.

Sempra recently an-nounced that the LNG import facility is fully operational. The company completed the terminal at an estimated cost of $1 billion and received its first LNG shipment from Qatar on April 18. A second LNG shipment arrived 10 days later.

"We have fully tested the system," said Darcel Hulse, who oversees the terminal and related development efforts as president of Sempra LNG.

The startup calls for pumping liquefied methane, which has been supercooled to minus 260 degrees, into Costa Azul's processing facility, where it is "re-gasified" at normal temperatures.

Sempra's tests included pumping natural gas from Costa Azul into new feeder lines, which Sempra built for about $215 million, and into existing gas pipelines serving California and Mexico.

The project represents a triumph for Sempra Chairman and Chief Executive Don Felsinger, whose political contacts in Baja California and work on cross-border issues helped facilitate Mexico's regulatory approval.

At least 14 similar LNG terminals have been proposed in recent years along the West Coast from Canada to Mexico, but Sempra's is the only one built so far. The list includes four proposals in Southern California, including an offshore project near Malibu, Calif., that sank under strong political and environmental opposition.

LNG opponents in Oregon have even argued that the startup of Energia Costa Azul makes LNG projects proposed along the Columbia River unnecessary.

For top executives at Sempra, the startup at Costa Azul also has begun to fulfill a corporate strategy formulated in the late 1990s that amounted to a multibillion-dollar bet on natural gas.

The 1998 merger of San Diego-based Enova and Los Angeles-based Pacific Enterprises created the nation's biggest natural-gas utility by combining the service territories of San Diego Gas & Electric Co. with Southern California Gas.

Considering the company's in-house expertise, it was a logical decision to Felsinger, who headed Sempra's initial efforts to develop a global energy business.

Felsinger and others said they especially benefited from insights derived from Sempra's energy-trading business. The traders helped Sempra's strategists identify market aberrations that reflected regional natural-gas shortages or surpluses across the United States and around the world.

"We were well aware that there's lots of natural gas in the world; it's just in the wrong spot," said Stephen Baum, Sempra's former chief executive. "So we thought we should, could get involved in bringing LNG to the U.S. We saw that as a business opportunity."

The patchy nature of the business, where natural-gas prices are high in some regions and low in others, led to the decision to "stake our future in being one of the nation's premier natural-gas-infrastructure players," Felsinger said.

As part of this strategy, Sempra expects to complete construction of another $1 billion LNG terminal in Hackberry, La., later this year. The company also has been developing mammoth, underground natural-gas-storage facilities and holds a 25 percent stake in a $4.9 billion pipeline project to move gas from northwestern Colorado to eastern Ohio.

Some experts are wondering, though, whether Sempra will realize much revenue in the near term from Energia Costa Azul or from the Louisiana LNG terminal, scheduled to begin operating next year.

Some analysts doubt that Sempra's LNG suppliers will fulfill their contracted deliveries because of competition from Asia, where the price of LNG is often higher than in the United States.

The 20-year contract that Sempra signed with BP and its Tangguh LNG partners in Indonesia allows BP and Tangguh to divert as much as half of Costa Azul's contracted supplies. Under the contract, the LNG suppliers still must pay Sempra for LNG cargoes that get diverted to higher-paying customers.

Sempra also has offset its risk by leasing half the capacity of Costa Azul for 20 years to Shell Oil Co., the U.S. arm of Royal Dutch Shell. Shell is obligated to begin making monthly payments once Costa Azul begins commercial operations, Sempra's Hulse said.

Sempra's contract deliveries from BP Tangguh won't begin until next spring, and some analysts contend that the U.S. market for LNG will be soft for a variety of reasons - at least in the immediate future.

Robert Ineson of Cambridge Energy Research Associates suggests that one reason for the soft market is that too many LNG terminals have been built.

Two other LNG terminals began commercial operations in April near the Gulf of Mexico, and a third is expected to soon start up near Boston.

The boom in LNG construction was triggered almost a decade earlier by soaring gas prices and industry predictions of shortfalls in U.S. gas production. Bill Cooper, president of the Center for Liquefied Natural Gas in Washington, D.C., said such predictions remain valid.

Natural-gas usage in the United States has remained fairly flat from 2003 to 2006, although total U.S. consumption jumped by 6.5 percent last year to more than 23 billion cubic feet, according to the Energy Information Administration.

Perhaps more importantly, natural-gas prices have been following the skyrocketing trend set by crude oil, with East Coast prices gaining nearly 25 percent since mid-March, according to Waterbourne Energy, a Houston consulting firm.

The continuing escalation in natural-gas prices also has motivated U.S. producers to develop new methods to extract gas from existing fields in East Texas, Pennsylvania and elsewhere.

Meanwhile, experts say that Asian competition for LNG supplies from Indonesia and other producers will be fierce, particularly in Japan.

Unlike the United States, Japan produces little if any of its own natural gas and relies heavily on imports. Other major Asian markets also lack access to the kind of pipeline supplies that exist here.

As a result, LNG customers in Asia are willing to pay a premium - especially Japan, which increased its demand for LNG used to generate electricity after an earthquake damaged its largest nuclear power plant.

One likely result is that lower shipping costs and other factors will make some LNG terminals busier than others, said Ineson, who is senior director of the North American Gas Group at Cambridge Energy Research Associates.

"We think LNG is mostly an Atlantic coast game because of the domestic natural-gas developments in the West" and lower shipping costs, Ineson said.

Such concerns leave Hulse unfazed.

Sempra has agreed to provide one-fourth of its gas from Costa Azul to Mexico's state-owned electric utility, Comision Federal de Electricidad. Beyond that, gas from the new terminal would be sold as available to any industrial or manufacturing customers.

"What people tend to do is see a short-term aberration in the market and project it as a long-term trend," Hulse said. "What you have to do is look over time at what you think will happen long term and what makes sense long term."

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