SAN DIEGO and MILAN, Aug. 1, 2005 Sempra LNG, a unit of Sempra Energy (NYSE: SRE), today announced it has executed a 20-year agreement to provide Eni S.p.A. (NYSE: E), one of the world's leading oil and natural gas exploration and production companies, with approximately 40 percent of the capacity of Sempra LNG's Cameron liquefied natural gas (LNG) receipt terminal under development near Lake Charles, La.
As a result of the agreement, Sempra LNG will begin construction on the terminal within the next two months. Cameron LNG is the second Sempra LNG terminal to begin construction this year.
Under this agreement, Sempra LNG will provide Eni with approximately 600 million cubic feet per day (MMcfd), or 6 billion cubic meters (Bcm) per year, of capacity in the Cameron LNG receipt terminal. Upon terminal completion in late 2008, Cameron LNG will have an initial send out capacity of approximately 1.5 billion cubic feet per day (Bcfd), or 15.5 Bcm per year, of natural gas. "We are pleased to be working with Eni and look forward to starting construction at Cameron LNG," said Darcel Hulse, president of Sempra LNG. "With this agreement, along with the other negotiations currently underway, we are confident that we will have the full terminal capacity under contract within a year."
Earlier this year, Sempra LNG awarded an engineering, procurement and construction contract for Cameron LNG, valued at about $500 million, to a consortium comprised of Aker Kvaerner of Norway and Tokyo-based Ishikawajima-Harima Heavy Industries. Aker Kvaerner has significant expertise in the engineering and construction of LNG receipt facilities, while Ishikawajima-Harima Heavy Industries is a market leader in the design and manufacturing of LNG storage and processing systems.
Cameron LNG is ideally located near Henry Hub and the Gulf Coast along the Calcasieu Ship Channel, about 15 miles south of Lake Charles.
Customers of Cameron LNG will gain access to U.S. interstate and intrastate natural gas pipelines via a new pipeline built and operated by Cameron Interstate Pipeline, LLC (Cameron Pipeline). Eni participated in Cameron Pipeline's open season and, as a result, Eni has also purchased capacity from Cameron Pipeline under a 20-year, 600 MMcfd. The 36-inch, 35-mile pipeline has received approvals to construct and operate from the Federal Energy Regulatory Commission. The Cameron Pipeline, a project of Sempra Pipelines & Storage, a unit of Sempra Energy, provides access of up to 12 Bcfd of downstream capacity to serve the Midwest, Southeast, Atlantic and Northeast U.S. markets.
Construction commenced early this year at Sempra LNG's West Coast terminal, Energía Costa Azul in Baja California, Mexico, which is expected to be operational in early 2008. When both terminals begin operation, Sempra LNG's total capacity at the two terminals will be 2.5 Bcfd, with room for expansion. LNG is natural gas that has been cooled below minus-260 degrees Fahrenheit and condensed into a liquid. LNG occupies 600 times less volume than in its gaseous state, which allows it to be shipped in cryogenic tankers from remote locations to markets where it is needed. At the receiving terminal, LNG is unloaded and stored until it is vaporized back into natural gas and moved via pipelines to customers.
Headquartered in Italy, Eni S.p.A. is an international company operating in the oil, natural gas, electricity generation, petrochemicals, engineering and construction and oilfield services sectors of the energy industry. The company is active in approximately 70 countries and has more than 76,000 employees. The company's 2004 consolidated net sales from operations of 58,346 million euros generated a net profit of 7,274 million euros.
Sempra LNG oversees LNG project development. Sempra Pipelines & Storage acquires, builds and operates natural gas pipelines and storage facilities in Mexico and the United States. Sempra Energy, based in San Diego, is a Fortune 500 energy-services holding company with 2004 revenues of $9.4 billion. The Sempra Energy companies' 13,000 employees serve more than 29 million consumers in the United States, Europe, Canada, Mexico, South America and Asia.
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Sempra LNG and Sempra Pipelines & Storage are not the same companies as the utilities, SDG&E or SoCalGas, and Sempra LNG is not regulated by the California Public Utilities Commission.