El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
El Paso Announces Agreement to Purchase Norwegian LNG from the Snøhvit Consortium
HOUSTON, TEXAS, October 18, 2001
El Paso Global LNG, a subsidiary of El Paso Corporation (NYSE:EPG), announced today that it has signed a definitive liquefied natural gas (LNG) purchase and sale agreement with a consortium of producers led by Statoil ASA. The consortium will develop the Snøhvit Project in northern Norway and provide El Paso with an annual delivery of approximately 1.8 million tons of LNG during the 17-year primary term of the agreement. This agreement will account for more than 40 percent of the total capacity to be produced at the Snøhvit Project's LNG liquefaction facility, which will be located on Melkøya Island, just north of Hammerfest, Norway.
The consortium will be responsible for developing the proven reserves that support this project, constructing the pipeline infrastructure and liquefaction facilities, as well as making all necessary LNG shipping arrangements. Norwegian governmental approvals for the project are expected early next year, and deliveries are scheduled to commence in 2006. El Paso will receive LNG shipments equivalent to an estimated 91 billion cubic feet per year of natural gas to be delivered at the existing Cove Point, Maryland LNG regasification terminal, or other North America and European destinations where the LNG will be regasified and sold as natural gas. The company has the capacity at Cove Point to deliver about 250 million cubic feet per day of natural gas into the East Coast pipeline infrastructure.
"We are extremely pleased to be a partner in Norway's first LNG export project," said William A. Smith, president of El Paso Global LNG. "This agreement will enable El Paso to supply an important new source of competitively priced natural gas for the growing Eastern and mid-Atlantic markets. We also expect to market additional supply at such time as the consortium decides to expand the LNG facility."
The agreement is part of El Paso Global LNG's announced goal of becoming a leading worldwide LNG merchant. The company plans to develop an LNG project on the North American West Coast with Phillips Petroleum, and has recently signed an agreement with Shell Gas and Power to develop an LNG regasification terminal in Altamira, Mexico. Additional LNG initiatives involve El Paso Merchant Energy, a subsidiary of El Paso Corporation, which has contracted for capacity at the Elba Island LNG facility located in Savannah, Georgia; holds long-term terminal capacity at Cove Point, Maryland; and imports LNG to the Lake Charles, Louisiana facility.
El Paso Global LNG is responsible for the advancement of LNG opportunities, including the development of LNG regasification terminals, shipping assets, and LNG supply resources worldwide. El Paso Corporation is committed to meeting energy needs throughout the United States and the world, with operations that span the energy value chain from wellhead to electron. El Paso is involved in every segment of the natural gas industry, including production, gathering and processing, and transmission. The company also provides merchant energy services, international project development, energy financing, power generation, and telecommunications services. El Paso is focused on speeding the development of new energy sources to address critical energy shortages across the globe. For more information, please visit www.elpaso.com.