Today at Gazprom headquarters Alexey Miller, Chairman of Gazprom Management Committee, and Donald Felsinger, President of Sempra Energy, a US company, signed the Memorandum of understanding.
The document stipulates conducting of studies on possibilities of using Sempra Energy’s terminals as re-gasification facilities in order to sell Russian gas in the USA.
Mr. Felsinger noted that “We are glad to point out that singing of the Memorandum may facilitate Russian gas supplies to the consumers in the United States where demand is very high”.
Alexey Miller stated that “Cooperation with Sempra Energy will be another step in facilitating Russian natural gas supplies to the US market. It is important for Gazprom that Sempra Energy is both a trading and gas transportation company which does not plan participating in gas production projects outside the United States”.
Sempra Energy was incorporated in 1998 after the merger of California based Southern California Gas and San-Diego Gas & Electric electricity producing and gas distribution companies. Later the American Insurance Group’s gas trading division and Enron Metal Trading company were purchased. Sempra Energy is now the second largest gas trader in North America, with its headquarters located in San-Diego, California.
Sempra Energy’s main business is natural gas transportation and sales, electricity generation (including generation facilities), metal trading. In 2004 the company’s turnover was US$ 9.4 billion, net profits – US$ 900 million. The company employs 13,000 people. Sempra Energy is in the 296th place among America’s largest 500 companies. The company is actively involved in energy projects in Mexico, Argentina, Chile, Peru, and is involved in gas sales in Europe.
Sempra Energy, together with British Petroleum and ConocoPhillips, is one of the leaders in the US energy market. In 2004 the company sold 109.5 billion cubic meters of gas, which is approximately 14% of the US market. Sempra Energy stated that LNG was a priority in its strategic development program.
Currently Sempra Energy is actively involved in designing and construction of its LNG receiving terminals in North America. Energha Costa Azul in Mexico, one of its terminals, is under construction due to be completed by 2008. Cameron near Lake Charles (Louisiana), its second terminal, has received all the necessary approvals. Its construction is planned to commence by the end of 2005, and is due to be completed by 2008. Port Arthur – the third terminal – located in Port Arthur (Texas) is currently under review by the Federal Energy Commission. It is expected to be operational by 2009.
In 2005 Gazprom plans to commence spot LNG supplies to the US market: the Russian pipeline gas will be exchanged for LNG supplied to the US.
In 2006-2009 these spot supplies will be made on the basis of mid-term contracts with American companies. After 2010, direct shipments of LNG to the US based on long-term contracts will commence.
There are four LNG receiving terminals in the US with the capacity of 45.8 billion cubic meters of gas. Another ten terminals are planned in the US east and west coasts with the annual capacity of 140 billion cubic meters. As of now only four terminals’ construction has been approved. Two of these terminals will be built by Sempra Energy.
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