El Paso & FPL Sign Agreement for Bahamas LNG Project

El Paso's subsidiaries have reached an agreement with an affiliate of FPL Group, whereby FPL Group Resources has an option to purchase the development rights of the High Rock liquefied natural gas (LNG) facility on Grand Bahama Island. In addition, FPL Group Resources has obtained an option to purchase a 50-percent equity interest in the proposed Seafarer pipeline system that will transport natural gas from the proposed Bahamas LNG facility to Southern Florida. Terms of the agreements were not disclosed.

"FPL Group Resources has recently formed a highly experienced LNG group charged with bringing cost-competitive LNG supplies to customers in the south and central Florida markets, and a partnership with them will provide a unique opportunity to maximize the expertise of each company," said John W. Somerhalder II, president of El Paso's Regulated Group. "We believe this project provides the best solution to bringing a critical fuel source for a region expected to demand an additional two billion cubic feet of natural gas per day by 2010. This agreement also supports El Paso's long-range plan by growing our pipeline business while maintaining our position as a premier natural gas transmission company in North America."

The Seafarer pipeline route has been modified to eliminate the extension from a proposed interconnection with Florida Gas Transmission (FGT) in West Palm Beach to Martin County. The pipeline route originates at the proposed LNG facility on Grand Bahama Island and continues to the Exclusive Economic Zone boundary approximately 87 miles away. The pipeline will continue approximately 35 miles and make landfall at Riviera Beach Power Plant and continue onshore for nearly six miles along existing utility and roadway corridors and connect into the existing FGT system. The 128-mile, 26-inch diameter Seafarer pipeline system will have a design capacity of approximately 750 million cubic feet per day and is expected to be in service by 2008.