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Sempra LNG Inks Deal with Italian Producer for Cameron LNG Capacity

Sempra LNG last week announced that it signed a 20-year deal to provide Italy's Eni S.p.A, a world leader in oil and gas production, with approximately 40% of the 1.5 Bcf/d capacity to be created by Sempra LNG's Cameron liquefied natural gas (LNG) terminal now under development near Lake Charles, LA.

As a result of the agreement, San Diego, CA-based Sempra LNG said it will begin construction of the import terminal within the next two months. The project is slated for completion in late 2008, according to the company. Cameron LNG is the second Sempra LNG terminal to start construction within the year -- the first one being the company's proposed West Coast Terminal in Baja California, Mexico.

Sempra LNG will provide Eni with approximately 600 MMcf/d of capacity from the Cameron LNG import terminal. "With this agreement, along with other negotiations currently underway, we are confident that we will have the full terminal capacity under contract within a year," said Sempra LNG President Darcel Hulse.

Sempra LNG said it still is negotiating a final agreement with Tractebel LNG North America LLC for up to 500 MMcf/d equivalent capacity at the Lake Charles facility.

The $700 million project was the first certificate issued by the Federal Energy Regulatory Commission for construction of a new LNG terminal in the United States in more than 25 years. FERC initially issued the certificate to Sempra LNG in September 2003, but the company later filed an amendment to modify the marine design of the facility and received permission this year.

Also this year, Sempra LNG awarded an engineering, procurement and construction contract for Cameron LNG, valued at about $500 million, to a consortium comprised of Aker Kvaerner of Norway and Tokyo-based Ishikawajima-Harima Heavy Industries.

Customers of Cameron LNG will gain access to U.S. interstate and intrastate natural gas pipelines via a new pipeline to be built and operated by Cameron Interstate Pipeline LLC. Eni has purchased 600 MMcf/d delivery capacity on the 36-inch diameter, 35-mile pipeline under a 20-year agreement. The pipeline will offer 12 Bcf/d of downstream capacity to serve the Midwest, Southeast, Atlantic and Northeast U.S. markets.

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