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Sempra Energy To Sell Michigan, Louisiana Natural Gas Storage Assets

Posted on: Saturday, 1 October 2005, 03:01 CDT

By Anonymous

Sempra Energy announced on Aug. 22 a definitive agreement to sell an indirect subsidiary whose principle assets are two natural gas storage facilities, Bluewater Gas Storage and Pine Prairie Energy Center, for approximately $250 million to Plains All American Pipeline, L.P. and Vulcan Capital.

Bluewater Gas Storage, located in St. Clair, MI, is a gas storage facility with current capacity of 20 Bcf that went into operation in May 2004. Pine Prairie Energy Center is a planned salt-cavern gas storage project with expected capacity of 24 Bcf under development in Evangeline Parish, LA.

"Due to current favorable market conditions, we believe this is an opportune time to monetize these gas storage assets, which are not critical to our LNG and gas infrastructure strategy," said Mark Snell, group president of Sempra Global, the umbrella for Sempra Energy's businesses operating in competitive energy and commodity markets.

Through its Sempra Pipelines & Storage unit, Sempra Global has signed binding agreements and will construct, own and operate the Cameron Interstate Pipeline, a 36-inch, 35-mile natural gas pipeline that will connect Cameron LNG, a terminal being constructed by affiliate Sempra LNG near Lake Charles, LA to interstate and intrastate pipelines.

Sempra Pipelines & Storage also is developing Liberty Gas Storage, a 17 Bcf salt-cavern gas storage facility in Calacasieu Parish, LA, located about 200 yards from the Cameron Pipeline. Liberty Gas is strategically located near several market hubs in the Gulf region, where marked production declines have contributed to tight supplies and volatility in daily and monthly prices increasing the demand for storage.

Liberty Gas is expected to be operational next year and Cameron LNG and Cameron Interstate Pipeline in 2008. The agreement includes the sale of Energy Center Investments Corporation, whose two principal assets are Bluewater Gas Storage and Pine Prairie Energy Center.

Copyright Oildom Publishing Company of Texas, Inc. Sep 2005

Source: Pipeline & Gas Journal

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