El Paso Acquires Stake in Miss. LNG Project

El Paso Corp. on Wednesday said that one of its subsidiaries has entered into an agreement to acquire a 50 percent interest in the Gulf LNG Clean Energy Project, a planned liquefied natural gas (LNG) terminal in Pascagoula, Miss. The subsidiary will operate the facility and will manage its construction. The terminal is expected to be placed in service in late 2011 at an estimated cost of $1.1 billion.

The Crest Group, consisting of Houston-based investors, will own 30 percent of the project, and Sonangol USA will own 20 percent. Sonangol is the state-owned national oil company of Angola, responsible for the development of Angola's hydrocarbon resources. The agreement to acquire an interest in the project from the Crest Group and Sonangol is subject to the clearance of certain customary contractual terms and conditions.

"We are pleased to extend our presence and expertise in the LNG terminal business through the Gulf LNG project," said Norman G. Holmes, senior vice president and chief commercial officer of Southern Natural Gas Company, a wholly owned subsidiary of El Paso. "El Paso has a long history with LNG, and we are excited to develop new infrastructure that provides additional sources of natural gas to meet the nation's growing energy needs."

The project, which received its Federal Energy Regulatory Commission certificate in February 2007, includes the construction of two, 160,000 cubic meter storage tanks with a combined capacity of 6.6 billion cubic feet (Bcf); 10 vaporizers, providing a base send-out capacity of 1.3 Bcf/d; and five miles of 36-inch pipeline, connecting the terminal to the Gulfstream, Destin, Florida Gas Transmission, and Transco pipelines.

Gulf LNG has negotiated 20-year firm service agreements for all of the capacity of the terminal with a group of LNG producers, including several major oil and gas companies, to support the facility and provide a source of LNG.

El Paso, which already owns one of only four currently operating land-based LNG regasification terminals in the U.S., located at Elba Island near Savannah, Georgia, provides natural gas and related energy products in a safe, efficient, and dependable manner. The company owns North America's largest interstate natural gas pipeline system and one of North America's largest independent natural gas producers.