SAN DIEGO, March 9, 2006 – Sempra LNG, a unit of Sempra Energy (NYSE: SRE) today announced that it has executed a capacity agreement with Merrill Lynch Commodities, Inc., a subsidiary of Merrill Lynch & Co., Inc., (NYSE: MER), to bring natural gas to the U.S. Gulf Coast.
The 15-year full-service capacity agreement provides Merrill Lynch Commodities the capability to import 3.7 million tonnes of LNG per year, the equivalent of 500 million cubic feet per day, through Sempra LNG’s Cameron LNG receipt terminal near Lake Charles, La. The agreement is contingent upon Merrill Lynch Commodities finalizing its LNG supply arrangements. Depending upon the timing of Merrill Lynch Commodities’ arrangements, Sempra LNG would have the flexibility to service the capacity agreement from either the first phase of Cameron LNG’s development, to be completed in 2008, or its proposed expansion, which could be completed in 2010.
“We are pleased to have signed this terminal capacity agreement with a company as respected and well-known as Merrill Lynch Commodities,” said Darcel Hulse, president of Sempra LNG. “Their knowledge of the marketplace confirms Cameron LNG’s position as a strategic gateway for LNG supplies into the United States.”
Sempra LNG has received approval from the Federal Energy Regulatory Commission to commence the mandatory pre-filing process to expand the company’s Cameron LNG receipt terminal’s throughput capacity to 2.65 billion cubic feet of natural gas per day (Bcfd) from 1.5 Bcfd. The initial construction phase of Cameron LNG is underway. Construction for the expansion could begin as early as next year.
In 2005, Sempra LNG announced it had executed a 20-year agreement to provide Eni S.p.A. (NYSE: E), one of the world’s leading oil and natural gas exploration and production companies, with approximately 600 million cubic feet per day of capacity in the Cameron LNG receipt terminal. The combined Eni and Merrill Lynch terminal capacity agreements account for approximately 1.1 Bcfd of natural gas through the Louisiana facility.
Sempra LNG’s Energía Costa Azul terminal in Baja California, Mexico, began construction in March 2005 and is on schedule to be operational by early 2008. Sempra LNG’s third LNG receipt terminal, Port Arthur LNG, near Port Arthur, Texas, is in the final stages of permitting and could be operational in 2009.
LNG is natural gas that has been cooled below minus-260 degrees Fahrenheit and condensed into a liquid. LNG occupies 600 times less volume 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 Energy, based in San Diego, is a Fortune 500 energy services holding company with 2005 revenues of $11.7 billion. The Sempra Energy companies’ 14,000 employees serve more than 29 million consumers in the United States, Europe, Canada, Mexico, South America and Asia.
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. When the company uses words like “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “may,” “would,” “should” or similar expressions, or when the company discusses its strategy or plans, the company is making forward-looking statements. 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, the California State Legislature, the California Department of Water Resources, the Federal Energy Regulatory Commission and other regulatory bodies in the United States and other countries; capital markets conditions, inflation rates, interest rates and exchange rates; energy and trading markets, including the timing and extent of changes in commodity prices; the availability of 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; and other uncertainties, all of which are difficult to predict and many of which are beyond the company’s control. These risks and uncertainties are further discussed in the company’s reports filed with the Securities and Exchange Commission that are available through the EDGAR system without charge at its Web site, www.sec.gov and on the company’s Web site, www.sempra.com.
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.