-- Agreement to Cover Joint Activities Including LNG Processing
and Natural Gas Marketing
-- Natural Gas Deliveries from Russia Could Reach North America
by 2008
SAN DIEGO and MOSCOW, April 25, 2005 (PRIMEZONE) -- Sempra Energy (NYSE:SRE) today announced that Sempra Global, the umbrella for the company's businesses operating in competitive energy markets, has signed a Memorandum of Understanding (MOU) with Gazprom, the largest natural gas producing company in the world, to cooperate in the delivery and associated marketing of liquefied natural gas (LNG) in North America.
Donald E. Felsinger, president and chief operating officer of Sempra Energy, and Alexey Miller, chairman of Gazprom, signed the MOU in Moscow today. The non-binding agreement contemplates importing Russian LNG into Sempra LNG's receipt terminals under development in North America and marketing of the natural gas through an arrangement with Sempra Commodities.
"We are pleased to sign this agreement to help facilitate the movement of Russia's plentiful natural gas into the North American marketplace, where it is needed," said Felsinger. "This represents a strategic alliance between Gazprom, the world's largest gas company, and Sempra Energy, one of the largest natural gas marketers in North America."
"This agreement is an important step in providing Russian gas supply to the U.S. market," said Miller. "Sempra Global is well-positioned as a gas trading and transportation company in the United States and, because they do not intend to enter the production business outside the United States, they make an ideal partner for us."
Sempra LNG, a unit of Sempra Global, currently is developing three LNG receipt terminals in North America. Its Energia Costa Azul terminal in Baja California, Mexico, is under construction and on schedule to be operational by 2008. The Cameron LNG terminal near Lake Charles, La., is fully permitted and could begin operations in 2008. The third LNG receipt terminal, Port Arthur LNG, near Port Arthur, Texas, is in the permitting process at the Federal Energy Regulatory Commission and could be operational in 2009.
Gazprom plans to begin exports of natural gas to the United States this year. The company also will begin drilling in Shtokman gas field in the Barents Sea, one of the world's biggest offshore gas fields with almost 3 trillion cubic meters of reserves, and begin exports from it in 2010-11. Miller said that offshore technological challenges were not a concern because of the company's related experience with the Norway North Sea field.
Gazprom, based in Moscow, Russia, is the world's largest natural gas producer with 540 billion cubic meters of sales in 2004. Gazprom has provided a reliable gas supply to the European market for almost 30 years.
Sempra Commodities, also a unit of Sempra Global, is a leading participant in marketing and trading of physical and financial commodity products, including natural gas, power, petroleum products and base metals. Sempra Commodities is one of the largest marketers of natural gas in North America.
Sempra LNG oversees LNG project development.
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.
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' more than 13,000 employees serve more than 10 million customers in the United States, Europe, Canada, Mexico, South America and Asia.
This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When the company uses words like "believes," "expects," "anticipates," "intends," "plans," "estimates," "may," "would," "should" or similar expressions, or when the company discusses its strategy or plans, the company is making forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future results may differ materially from those expressed in the forward-looking statements. Forward-looking statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others: local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments; actions by the California Public Utilities Commission, the California State Legislature, the California Department of Water Resources, the Federal Energy Regulatory Commission and other regulatory bodies in the United States and other countries; capital markets conditions, inflation rates, interest rates and exchange rates; energy and trading markets, including the timing and extent of changes in commodity prices; the availability of natural gas; weather conditions and conservation efforts; war and terrorist attacks; business, regulatory, environmental, and legal decisions and requirements; the status of deregulation of retail natural gas and electricity delivery; the timing and success of business development efforts; and other uncertainties, all of which are difficult to predict and many of which are beyond the company's control. These risks and uncertainties are further discussed in the company's reports filed with the Securities and Exchange Commission that are available through the EDGAR system without charge at its Web site, www.sec.gov and on the company's Web site, www.sempra.com.
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.