Sempra LNG, a unit of Sempra Energy has announced that it had signed a Heads of Agreement (HOA) with Sonatrach S.A., Algeria’s leading energy company, and is proceeding with detailed negotiations to bring Algerian natural gas to the U.S. Gulf Coast. The negotiations include exploring additional opportunities to market the natural gas in the United States.
Sonatrach S.A. is Algeria’s state-owned natural gas and oil refining company and plays the lead role in that nation’s energy-related transactions.
The non-binding HOA contemplates a 20-year agreement to import 250 million cubic feet per day (MMcfd) to 500 MMcfd of Algerian liquefied natural gas (LNG) to Sempra LNG’s Cameron LNG receipt terminal under development near Lake Charles, La. “We are pleased to be working with one of the world’s largest LNG exporters to help facilitate the movement of Algeria’s plentiful natural gas into the North American marketplace,” said Darcel Hulse, president of Sempra LNG. “This agreement represents a potential strategic opportunity between Sonatrach, one of the world’s largest LNG companies, and Sempra Energy, the largest non-producing natural gas marketer in North America.”
“This agreement is an important step to move Algerian natural gas to the U.S. market, as this will reinforce Sonatrach’s position in the Atlantic basin,” said Mohamed Meziane, Sonatrach chief executive officer. “Sempra Energy is a leading natural gas trading and transportation company in the United States and is well qualified to help expand Sonatrach’s presence there.”
Sempra LNG currently is developing three LNG receipt terminals in North America. Its Energía Costa Azul terminal in Baja California, Mexico, began construction in March 2005 and is on schedule to be operational by early 2008. The Cameron LNG terminal is under construction and on target to begin operations in late 2008. The third LNG receipt terminal, Port Arthur LNG, near Port Arthur, Texas, is in the permitting process at the Federal Energy Regulatory Commission and could be operational in 2009.
Algeria is the second largest LNG exporter in the world with an installed capacity of 20 million tonnes. Algeria has 40 years’ experience in the LNG industry and began making deliveries from its Arzew plant in 1964. Future plans include the construction of two new plants with a total capacity of 8.5 million tonnes located in Skikda (4.5 million tonnes) and Arzew (4 million tonnes).
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’ more than 13,000 employees serve more than 10 million customers in the United States, Europe, Canada, Mexico, South America and Asia.