Sempra Pipelines & Storage completes acquisition of El Paso Corp. assets in Mexico
SAN DIEGO, May 3, 2010 – Sempra Pipelines & Storage, a unit of Sempra Energy (NYSE: SRE), today announced the completion of its acquisition of the Mexican pipeline and gas infrastructure assets of El Paso Corp. (NYSE: EP) for $300 million ($260 million, net of cash and debt).
The acquisition, which was announced on Feb. 24, 2010, includes a natural gas pipeline and compression assets in the Mexican state of Sonora and a 50-percent interest in a joint venture with PEMEX, the Mexican state-owned oil company. The joint venture operates two natural gas pipelines and a propane system in northern Mexico.
“We are pleased with the closing of this transaction and the positive support from the Mexican regulators,” said George S. Liparidis, president and chief executive officer of Sempra Pipelines and Storage. “These new assets allow us to quickly expand our natural gas infrastructure business in northern Mexico. “
The pipeline and natural gas infrastructure assets acquired are supported by customer contracts with an average duration of 13 years.
As part of the transaction, Sempra Pipelines & Storage acquired a seven-mile natural gas pipeline and a compressor station in the state of Sonora, which transports natural gas from the U.S. border to a Mexico power plant that provides electricity to the Comisión Federal de Electricidad, the country’s state-owned electric utility.
The joint venture with PEMEX owns and operates: the 23-mile, 24-inch Samalayuca natural gas pipeline and Gloria a Dios compressor station in Chihuahua that supply natural gas from the U.S. to various Mexican power plants; the 70-mile, 36-inch San Fernando natural gas pipeline in the state of Tamaulipas; and the 114-mile, 12-inch pipeline that transports liquid propane from the Burgos production area to a delivery facility near the city of Monterrey.
The transaction has received authorization from the Mexican Federal Competition Commission.
Sempra Pipelines & Storage owns several other assets in Mexico, including pipelines in Baja California connecting Sempra LNG’s liquefied natural gas receipt terminal near Ensenada with various power plants in the region, as well as with pipeline systems in the United States. Sempra Pipelines & Storage also owns Ecogas Mexico S.R.L., a natural gas utility that serves more than 90,000 residential, commercial and industrial customers in Northern Mexico with operations in Mexicali, Chihuahua, La Laguna (“Torreon- Gomez Palacio”) and Durango.
Sempra Pipelines & Storage develops, builds and operates natural gas pipelines and storage facilities in Latin America and the United States. The company and its affiliates operate and/or own more than 1,200 miles of pipelines and are developing an additional 800 miles to help meet North America’s growing demand for energy. It also manages natural gas and electricity distribution in Argentina, Chile, Mexico and Peru. Sempra Pipelines & Storage is a subsidiary of Sempra Energy, a San Diego-based Fortune 500 energy services holding company.
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,” “would,” ”could,” “should,” or similar expressions, or discussions of strategies, plans 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, California Department of Water Resources, Federal Energy Regulatory Commission, Federal Reserve Board, and other regulatory and governmental bodies in the United States and other countries where the company does business; capital market conditions and inflation, interest and exchange rates; energy and trading markets, including the timing and extent of changes and volatility in commodity prices; the availability of electric power, natural gas and liquefied 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; 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 without charge at the SEC’s Web site, www.sec.gov and on the company’s Web site, at www.sempra.com.
Sempra Pipelines & Storage, Sempra Generation, Sempra LNG and RBS Sempra Commodities dba Sempra Energy Solutions and Sempra Energy Trading are not the same companies as the utility, San Diego Gas & Electric (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra Pipelines & Storage, Sempra Generation, Sempra LNG and RBS Sempra Commodities dba Sempra Energy Solutions and Sempra Energy Trading are not regulated by the California Public Utilities Commission.