-- Twenty-year Contract Contemplated to Begin in 2008
-- Involves Up to One-third of Terminal's Total Capacity
SAN DIEGO, Jan. 27, 2005 (PRIMEZONE) -- Sempra LNG, a unit of Sempra Energy (NYSE:SRE), today announced it has signed a Heads of Agreement (HOA) that provides Tractebel LNG North America LLC (Tractebel LNG NA), the North American liquefied natural gas (LNG) business of Tractebel Electricity & Gas International, one of the business divisions of SUEZ (NYSE:SZE), with up to one-third of the processing capacity of Sempra LNG's Cameron LNG receipt terminal under development near Lake Charles, La.
The non-binding HOA contemplates finalizing a definitive 20-year capacity agreement by June 30, 2005.
Under the proposed agreement, Sempra LNG would sell Tractebel LNG NA between 325 million cubic feet per day (MMcfd) and 500 MMcfd of throughput capacity in the company's Cameron LNG receipt terminal.
Upon its completion in 2008, Cameron LNG will have an initial throughput capacity of 1.5 billion cubic feet per day of natural gas.
"This agreement combines Tractebel LNG NA's considerable experience in importing LNG to the United States with Sempra Energy's expertise in developing major natural gas infrastructure," said Darcel L. Hulse, president of Sempra LNG. "Our joint efforts will help bolster North American gas supplies and provide energy customers with a reliable and competitively priced source of our nation's environmentally preferred fossil fuel of choice."
Additional supply and capacity agreements involving Cameron LNG are being negotiated.
Cameron LNG is located near the Gulf Coast along the Calcasieu River, about 15 miles south of Lake Charles. In April 2004, the Federal Energy Regulatory Commission authorized the project's construction and operation. The project is fully permitted and is slated to begin construction later this year.
On Jan. 3, 2005, Sempra LNG announced it had awarded the engineering, construction and procurement contracts for Cameron LNG to a consortium comprised of Aker Kvaerner of Norway and Tokyo-based Ishikawajima-Harima Heavy Industries.
Another Sempra LNG project, Energia Costa Azul, is designed to help Baja California, Mexico, meet its long-term energy needs, providing, at the same time, significant supplies for the U.S. market. It will be the first major LNG receipt terminal built on North America's West Coast. Sempra LNG is the sole owner and operator of Energia Costa Azul. The company has signed a 20-year agreement to provide Shell International Gas Limited with half the facility's capacity, or 500 MMcfd. The remaining capacity will be utilized to process 500 MMcfd of LNG, which Sempra LNG has procured from Indonesia's Tangguh LNG project. Construction at Energia Costa Azul has commenced and is scheduled to be complete in early 2008.
LNG is natural gas that has been cooled below minus-260 degrees Fahrenheit and condensed into a liquid. LNG occupies 600 times less space 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.
Tractebel LNG NA is a wholly owned subsidiary of Tractebel North America, Inc., the business unit of Tractebel Electricity & Gas International (EGI) responsible for managing EGI's positions within the energy value chain in the United States, Mexico, and Canada, including electricity generation and cogeneration, natural gas and LNG, asset-based trading and origination, and energy sales and related services.
Tractebel LNG NA's wholly owned subsidiary, Distrigas of Massachusetts LLC, owns and operates an LNG receiving terminal in Everett, Mass., which commenced operations in 1971 and currently serves most of the gas utilities in New England and key power producers, meeting approximately 20 percent of New England's annual gas demand. In addition, Tractebel LNG NA is the primary supplier of LNG to Puerto Rico. The company also makes regular LNG deliveries to the LNG receiving terminal in Cove Point, Md., as well as spot deliveries to the LNG facility in Lake Charles.
For more information about SUEZ, Tractebel Electricity & Gas International, or Tractebel North America, visit www.egi.tractebel.com
Sempra LNG, a unit of Sempra Global, oversees LNG project development. Sempra Energy (NYSE:SRE), based in San Diego, is a Fortune 500 energy services -holding company with 2003 revenues of $7.9 billion. The Sempra Energy companies' 13,000 employees serve more than 10 million customers in the United States, Europe, Canada, Mexico, South America and Asia.
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Sempra LNG is not the same company as the utility, SDG&E or SoCalGas, and Sempra LNG is not regulated by the California Public Utilities Commission.