Sempra LNG begins FERC approval process to expand Cameron LNG receipt terminal

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Sempra Energy

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        SAN DIEGO, Jan. 10, 2006 – Sempra LNG, a unit of Sempra Energy (NYSE: SRE), today announced it has received approval from the Federal Energy Regulatory Commission (FERC) to begin the mandatory pre-filing process to expand the company’s Cameron LNG receipt terminal’s production capacity to 2.65 billion cubic feet of natural gas per day (Bcf/day) from 1.5 Bcf/day.  

        The formal application for the expansion will be filed later this year at the completion of the pre-filing process.  The final FERC decision on that liquefied natural gas (LNG) receipt terminal expansion application is expected in early 2007.

         “Because of its prime location on the Gulf Coast with access to the Midwest and East Coast markets, we have received enough interest from LNG suppliers for additional capacity at our Cameron terminal to begin the approval process,” said Darcel L. Hulse, president of Sempra LNG.  “We want to be prepared to meet the needs of the market as it develops.”

        The initial construction phase of Cameron LNG is underway near Lake Charles, La., and is slated for completion in late 2008.  The proposed expansion is expected to commence in 2007 and be completed in 2010.

        Under provisions of the recent energy bill passed by Congress, all LNG facility applications must now undergo the pre-filing process.  This is the same process that Sempra LNG voluntarily used for its Port Arthur, Texas, LNG terminal filing, before FERC made the pre-filing process mandatory. 

        The proposed $250 million expansion of the LNG receipt terminal will involve the addition of gas processing facilities and one new LNG storage tank, requiring the development of an additional 15 acres of the 275-acre site.  When the expansion is complete, there will be a total of four LNG storage tanks at Cameron LNG, each capable of storing 160,000 cubic meters of LNG. 

        Cameron LNG is located near the Gulf Coast along the Calcasieu River, about 15 miles south of Lake Charles.  In April 2004, the FERC authorized the project’s construction and operation.

        In early 2005, Sempra LNG announced it had awarded the engineering, construction and procurement contracts for Cameron LNG to a consortium comprised of Aker Kvaerner of Norway and Tokyo-based Ishikawajima-Harima Heavy Industries.

        Sempra LNG also is building an LNG receipt terminal in Baja California, Mexico -- Energía Costa Azul -- which will be the first on North America’s West Coast when it is completed in early 2008.  The company is in the final stage of licensing Port Arthur LNG and construction is estimated to begin in 2007.

        LNG is natural gas that has been cooled below minus-260 degrees Fahrenheit and condensed into a liquid.  LNG occupies 600 times less space 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 LNG, a unit of Sempra Global, oversees LNG project development.  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’ 13,000 employees serve more than 10 million customers in the United States, Europe, Canada, Mexico, South America and Asia. 

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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.