-- Heads of Agreement Signed for Capacity at Cameron LNG Receipt Terminal -- Natural Gas Deliveries from Algeria Could Reach Gulf Coast by 2008-09
SAN DIEGO and ALGIERS, Algeria, Oct. 25, 2005 (PRIMEZONE) -- Sempra LNG, a unit of Sempra Energy (NYSE:SRE), today announced that it has signed a Heads of Agreement (HOA) with Sonatrach S.A., one of the world's leading energy companies, and is proceeding with detailed negotiations to bring Algerian natural gas to the U.S. Gulf Coast. The negotiations include exploring additional opportunities to market the natural gas in the United States.
Sonatrach S.A. is Algeria's state-owned natural gas and oil refining company and plays the lead role in that nation's energy-related transactions.
The non-binding HOA contemplates a 20-year agreement to import 250 million cubic feet per day (MMcfd) to 500 MMcfd of Algerian liquefied natural gas (LNG) to Sempra LNG's Cameron LNG receipt terminal under development near Lake Charles, La.
"We are pleased to be working with one of the world's largest LNG exporters to help facilitate the movement of Algeria's plentiful natural gas into the North American marketplace," said Darcel Hulse, president of Sempra LNG. "This agreement represents a potential strategic opportunity between Sonatrach, one of the world's largest LNG companies, and Sempra Energy, the largest non-producing natural gas marketer in North America."
"This agreement is an important step to move Algerian natural gas to the U.S. market, as this will reinforce Sonatrach's position in the Atlantic basin," said Mohamed Meziane, Sonatrach chief executive officer. "Sempra Energy is a leading natural gas trading and transportation company in the United States and is well qualified to help expand Sonatrach's presence there."
Sempra LNG currently is developing three LNG receipt terminals in North America. Its Energia Costa Azul terminal in Baja California, Mexico, began construction in March 2005 and is on schedule to be operational by early 2008. The Cameron LNG terminal is under construction and on target to begin operations in late 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.
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.
Algeria is the second largest LNG exporter in the world with an installed capacity of 20 million tonnes. Algeria has 40 years' experience in the LNG industry and began making deliveries from its Arzew plant in 1964. Future plans include the construction of two new plants with a total capacity of 8.5 million tonnes located in Skikda (4.5 million tonnes) and Arzew (4 million tonnes).
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.