The project will rise in Baja California, about 60 miles south of San Diego. It will be the first liquid natural gas terminal on the West Coast and also mark the increasingly important role that Mexico is playing in the efforts to solve the energy shortage facing not just California but many other parts of the western US.

The plant will be build by a partnership of Sempra Energy--parent of LA-based Southern California Gas Co. and San Diego Gas & Electric--and CMS Energy Corp. Michigan-based CMS has built dozens of natural gas and electric projects all over the world.

The partners say the Baja California facility could become operational by 2005, after a crucial pipeline that would run hundreds of miles across the border is built. However, the plan could face opposition from residents of Baja California as well as from environmentalists.