Sempra Energy Unit Signs Agreement To Acquire LNG Project From Dynegy Midstream Services
Sempra LNG Corp., the new unit, initially will pay Dynegy $20 million, with additional contingent payments based on the performance of the project.
The Hackberry LNG project has received preliminary approval from the Federal Energy Regulatory Commission (FERC), and a final decision is expected later this year. Pending approval, Sempra LNG Corp. will build an LNG receiving facility capable of processing up to 1.5 billion cubic feet per day of natural gas.
The total cost for developing the project is expected to be about $700 million. The project is anticipated to begin commercial operation in early 2007.
“As domestic supplies of natural gas fail to keep pace with energy demand in North America, LNG is going to become an increasingly important part of the energy supply mix for North America over the next decade,” said Donald E. Felsinger, group president of Sempra Energy Global Enterprises. “This strategic acquisition of the Hackberry project will provide us a solid foothold in this critical market.”
“The biggest single challenge in meeting North America’s natural gas demand will be the siting and permitting of new LNG receipt facilities,” said Darcel L. Hulse, president of both Sempra LNG and Sempra Energy International. “The Hackberry project enjoys a good location, is well-advanced in the permitting process and has received a precedent-setting preliminary approval from the FERC that provides much-needed flexibility for the development of LNG infrastructure. This acquisition greatly accelerates Sempra Energy’s North American LNG plans.”
Sempra Energy International also has proposed to build the Costa Azul LNG project in Baja California, Mexico, at a site about 14 miles north of Ensenada. Upon completion, the Hackberry and Costa Azul LNG projects would process a combined total of 2.5 billion cubic feet per day of natural gas.
The closing of the Hackberry transaction depends on the termination or expiration of the applicable waiting period under the Hart-Scott-Rodino Improvements Act and other customary closing conditions.
Sempra Energy Global Enterprises is the umbrella for Sempra Energy’s growth businesses, which develop and operate power plants, natural gas transmission pipelines and supply facilities, as well as market energy products and services. The Sempra Energy Global Enterprises group includes Sempra Energy Trading, Sempra Energy Resources, Sempra Energy International, Sempra Energy Solutions and Sempra LNG.
