El Paso Corporation Acquires Stake in Gulf LNG Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--Southern Natural Gas Company, a subsidiary of the El Paso Corporation (NYSE:EP) (Houston, Texas), has acquired a 50% stake in the Gulf LNG Clean Energy project. The Gulf liquefied natural gas terminal will be built near Chevron's refinery complex in Pascagoula, Mississippi. Sonangol USA owns 20%, and a group of Houston-based investors, the Crest Group, owns 30%.

The proposed import terminal is expected to cost $1.1 billion. When Industrial Info began tracking this project, the total investment value was estimated at $450 million. The terminal will consist of a ship berth, two 160,000-cubic-meter cryogenic tanks, 10 high-pressure submerged combustion vaporizers, 5.02 miles of 36-inch-diameter pipeline and associated supporting equipment to provide up to 1.5 billion cubic feet per day.

Technip Incorporated was awarded the contract for front-end engineering and development (FEED). Technip's scope of work for the FEED included process development, plot plans, equipment specifications and additional engineering data required for permits filing support for the terminal. Aker Kvaerner has been awarded the engineering, procurement and construction contract. Initial site-preparation activities including clearing, grubbing, excavation and dredging began in October 2007. The terminal is expected to be operational by late 2011.

Southern LNG Incorporated, another subsidiary of the El Paso Corporation operates the Elba Island receiving terminal near Savannah, Georgia. The terminal has four tanks with a combined capacity of 7.3 billion cubic feet and regasification facilities with a daily peak output capacity of more than 1.2 billion cubic feet. Elba Island is the first U.S. LNG import terminal to simultaneously accommodate two tankers. Southern LNG recently received approval from the Federal Energy Regulatory Commission to begin site preparation activities for a fifth 4.2 billion-cubic-feet storage tank, bringing the total storage capacity to 11.2 billion cubic feet. The dock will also be expanded to accommodate larger LNG vessels. Chicago Bride & Iron (NYSE:CBI) (Hoofddorp, Netherlands) has been awarded the contract to handle both the engineering and construction for the approximately $300 million project. The expansion is expected to come into service in June 2010.

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