Sempra Energy To Expand Presence With $510MM Acquisition
In a $510-million cash deal, Sempra Energy is acquiring Mobile, Ala.-based EnergySouth Inc. that will held expand its presence across the southeastern U.S.
As part of the deal, Sempra Energy will acquire a majority ownership in two high-cycle underground gas storage caverns that when developed, will have a capacity of 57 billion cubic feet. Sempra Energy will also be buying Mobile Gas Service Corp., a gas distribution utility owned by EnergySouth that serves about 93,000 customers in southwest Alabama.
“This acquisition supports our natural gas strategy by expanding our Gulf Coast operations to serve key markets where gas demand outpaces the national average. These new assets complement our existing operations in the region and position us for future growth,” says Sempra Energy chief executive Donald F. Felsinger.
EnergySouth Midstream is the general partner and a 91% owner of Bay Gas Storage Co., a facility about 40 miles north of Mobile. The storage site is key to markets on the Gulf Coast and especially in Florida. The facility has 11.4 billion cubic feet of working storage capacity that is fully contracted and operational. An additional 5 billion cubic feet is 92% contracted and is now under construction and should be operational by early 2010.
EnergySouth Midstream has reported that there are plans to increase the total capacity to 28 billion cubic feet. The company also has another underground storage facility in Simpson County, Mississippi, called the Mississippi Hub. This site, through direct interconnections, has access to gas production areas in Texas, Oklahoma and Arkansas and targets the northeastern market.
The first 6 billion cubic feet of storage capacity is currently under construction. An in-service date of 2010 is expected and that are plans to increase the total Mississippi Hub to 30 billion cubic feet.
–John A. Sullivan, News Editor, Oil and Gas Investor, www.OilandGasInvestor.com, jsullivan@hartenergy.com
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