Exxon Buys SoCalGas Processing, Offshore Facilities
Exxon Company U.S.A. will buy a coastal processing facility 25
miles west of Santa Barbara from a Southern California Gas
affiliate for an undisclosed amount, it was announced last week.
The plant processes 60 MMcf/d of offshore California natural gas
produced by Exxon's Platform Honda.
The deal involves Exxon buying the stock of Pacific Offshore
Pipeline Company (POPCO), an affiliate of SoCalGas under the Sempra
Energy corporate umbrella, within the next 60 to 90 days. SoCalGas
would continue to be the buyer for the plant's output under
long-term contracts it has had in place for the last 15 years,
except for revisions made in 1994.
Exxon decided to exercise an option it obtained in 1994 to buy
the gas processing facility as part of SoCalGas's global settlement
with its major suppliers and shippers as a means of attempting to
help make its transportation more competitive in the face of
increased competition from two new interstate pipelines entering
the California market in the early 1990s. Exxon had a five-year
option to buy that would have expired at the end of this year.
Included in the purchase is an eight-mile pipeline from the
offshore gas production platform in the Santa Barbara Channel to
the onshore processing plant that cleans the gas for transmission
and distribution among SoCalGas's other supplies that range between
2 and 3 Bcf/d.
The processing plants currently employees 51 people, all of whom
are slated to be laid off when the deal is finalized, although some
of them may be offered jobs with Exxon when it takes over or in
othere parts of the Sempra Energy companies.
Sempra Energy officials said it has transition plans in place
with Exxon to ensure the continued "safe operation of the plant and
compliance with all government regulations."
Exxon had been reviewing the POPCO plant operations and
financial data throughout 1998 before making its purchase decision,
"so this exercise of the purchase option does not come as a
complete surprise," said Mike Walker, POPCO's president. "However,
Sempra Energy Resources would gladly have continued ownership of
this efficient and profitable business."
Richard Nemec, Los Angeles
©Copyright 1998 Intelligence Press, Inc. All rights
reserved. The preceding news report may not be republished or
redistributed in whole or in part without prior written consent of
Intelligence Press, Inc.