Sempra International Unit To Construct Natural Gas Pipeline Network In Northwestern Mexico
Oct 22, 2012
SAN DIEGO, Oct. 22, 2012 /PRNewswire/ -- Sempra International today announced that its Mexican business unit Sempra Mexico has been awarded two contracts by Comision Federal de Electricidad (CFE), Mexico's state-owned electric utility, to construct, own and operate an approximately 500-mile (820-kilometers), $1 billion pipeline network connecting the Northwestern states of Sonora and Sinaloa.
After a competitive and transparent international public bidding process, Sempra Mexico's offers were selected to develop the new pipeline network. The network will be comprised of two segments that will interconnect to the U.S. interstate pipeline system in Arizona and will provide natural gas to new and existing CFE power plants that currently use fuel oil. The capacity for each segment is fully contracted by CFE under two 25-year firm capacity contracts denominated in U.S. dollars.
"We are pleased to have been awarded these projects, which will strengthen the gas transportation system in northern Mexico," said George Liparidis, president and CEO of Sempra International. "These projects represent an extension of our core business in Mexico and an important part of our plan to grow our international business."
The first segment, a 36-inch, 310-mile (500-kilometer) pipeline will run from Sasabe, south of Tucson, Ariz., to Guaymas, Sonora, and will have the capacity of 770 million cubic feet (Mcf) of natural gas per day. The new pipeline is expected to begin operations late 2014.
The second segment from Guaymas to El Oro, Sinaloa, is a 30-inch, 200-mile (320-kilometer) pipeline with a capacity of 510 Mcf of natural gas per day. The pipeline is planned to begin operations in the third quarter of 2016.
"This new pipeline network will provide reliable access to clean natural gas to CFE's plants in Sonora and Sinaloa," said Carlos Ruiz, president and CEO of Sempra Mexico. "We have a long and successful history of safe, efficient and reliable operations in Mexico and we appreciate the confidence that CFE has placed in us. We look forward to creating new jobs in these communities and improving the local economy for years to come."
Sempra Mexico is a wholly owned subsidiary and part of Sempra International, one of four principal operating divisions of Sempra Energy (NYSE: SRE). Sempra Mexico has nearly 400 employees and has over $2.4 billion in assets, including more than 430 miles (700 kilometers) of natural and liquefied petroleum gas pipelines in all six northern Mexican states.
Sempra International distributes energy and operates in competitive energy markets of the Americas. Its subsidiaries develop, build and operate energy infrastructure assets, and distribute natural gas in Mexico and electricity to customers in Chile and Peru.
Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2011 revenues of $10 billion. The Sempra Energy companies' 17,500 employees serve more than 31 million consumers worldwide.
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. These statements can be identified by words like "believes," "expects," "anticipates," "intends," "plans," "estimates," "may," "will," "would," "could," "should," "potential," "target," "outlook," "depends," "pursue" or similar expressions, or discussions of guidance, strategies, plans, goals, initiatives, objectives or intentions. 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, California State Legislature, Federal Energy Regulatory Commission, U.S. Department of Energy, Nuclear Regulatory Commission, California Energy Commission, California Air Resources Board, and other regulatory, governmental and environmental bodies in the United States and other countries where the company does business; capital market conditions, including the availability of credit and the liquidity of investments; inflation, interest and exchange rates; the impact of benchmark interest rates, generally the U.S. Treasury bond and Moody's A-rated utility bond yields, on the California utilities' cost of capital; the timing and success of business development efforts and construction, maintenance and capital projects, including risks inherent in the ability to obtain, and the timing of the granting of, permits, licenses, certificates and other authorizations; energy markets, including the timing and extent of changes and volatility in commodity prices; the availability of electric power, natural gas and liquefied natural gas, including disruptions caused by failures in the North American transmission grid, pipeline explosions and equipment failures; weather conditions, natural disasters, catastrophic accidents, and conservation efforts; risks inherent in nuclear power generation and radioactive materials storage, including catastrophic release of such materials; risks posed by decisions and actions of third parties who control the operations of investments in which the company does not have a controlling interest; wars, terrorist attacks and cyber security threats; business, regulatory, environmental and legal decisions and requirements; expropriation of assets by foreign governments and title and other property disputes; the status of deregulation of retail natural gas and electricity delivery; the inability or determination not to enter into long-term supply and sales agreements or long-term firm capacity agreements; the resolution of litigation; and other uncertainties, all of which are difficult to predict and many of which are beyond the control of the company. These risks and uncertainties are further discussed in the reports that Sempra Energy has filed with the Securities and Exchange Commission. These reports are available through the EDGAR system free-of-charge on the SEC's website, www.sec.gov, and on the company's website at www.sempra.com
These forward-looking statements speak only as of the date hereof, and the company undertakes no obligation to update or revise these forecasts or projections or other forward-looking statements, whether as a result of new information, future events or otherwise.
Sempra International, LLC, and Sempra U.S. Gas & Power, LLC, are not the same companies as San Diego Gas & Electric (SDG&E) or Southern California Gas Company (SoCalGas) and Sempra International and Sempra U.S. Gas & Power are not regulated by the California Public Utilities Commission.
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