Southern Union Completes Phase II Expansion of LNG Terminal

Southern Union Co.

Southern Union Co. said that it has completed the Phase II expansion of its Trunkline LNG Co. terminal, which is the largest liquefied natural gas (LNG) terminal in North America.

The Phase II expansion increased sendout capacity at the terminal to 1.8 billion cubic feet per day (Bcf/d) and increased peak sendout capacity to 2.1 Bcf/d. The Phase II expansion also included the construction of unloading capabilities at the terminal's second dock.

This expansion comes on the heels of the Phase I expansion, which included the addition of a second ship berth and a new LNG storage tank that increased terminal storage capacity to 9 billion cubic feet and was placed in service on April 5. The additional vaporization capacity in Phase I, which increased sendout capability to 1.2 Bcf/d with peak capacity of 1.5 Bcf/d , was placed in service in the fall of 2005.

The capacity of the Phase I and Phase II expansions, in addition to the terminal's original base capacity, is fully contracted to BG LNG Services, L.L.C., a subsidiary of U.K.-based BG Group, under long-term agreements through 2028.

In order to increase takeaway capacity from the LNG terminal, Southern Union's Trunkline Gas Co. built a second 36-inch-diameter natural gas pipeline from the LNG terminal to Trunkline's existing mainline between Kaplan, La., and Longville, La. This pipeline, which went into service in July 2005, increased takeaway capacity from the terminal to 2.1 Bcf/d.

"Completing the Phase II expansion is a major milestone for Southern Union," said Rob Bond, senior vice president of pipeline operations for Southern Union and president of Panhandle Energy. "The Trunkline LNG terminal has the highest sendout capacity of any terminal in the country, and the completion of this expansion allows Trunkline LNG to maintain its position as one of the most modern and competitively-priced providers of regasification capacity in the United States."

As previously announced, Trunkline LNG also has another expansion planned for the terminal. The next project, the infrastructure enhancement project, is designed to increase fuel efficiency and cost savings using the ambient air temperature to warm and regasify the LNG. Trunkline LNG also will build a natural gas liquids (NGL) extraction plant at the terminal in order to increase product flexibility.

The addition of NGL extraction equipment will give BG LNG Services, Trunkline LNG's customer, the ability to extract ethane and other heavier hydrocarbons from the LNG stream before the gas is sent to the interstate pipeline network and delivered to downstream markets. Due to the world wide variability in the composition of LNG, adding the ability to extract natural gas liquids will allow BG LNG to import supply from more diverse locations. These enhancements are planned to be in service in mid-2008.

BG Group plc is a global natural gas business. Active on five continents in more than 20 countries, it operates four business segments: Exploration and Production, LNG, Transmission and Distribution, and Power.

In the U.S., BG LNG Services (BGLS) holds, through 2028, 100 percent of the capacity rights at North America's largest operating LNG importation terminal, Lake Charles in Louisiana. This has the capability to receive, store, vaporize, and deliver an average daily send out of 1.8 billion cubic feet per day (bcf/d).

Southern Union Co., headquartered in Houston, is one of the nation's leading diversified natural gas companies, engaged primarily in the transportation, storage, gathering, processing, and distribution of natural gas. The company owns and operates the nation's second-largest natural gas pipeline system with more than 22,000 miles of gathering and transportation pipelines and North America's largest liquefied natural gas import terminal.