El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
El Paso Corporation and DKRW Energy Enter Agreement to Build Sonoran Pipeline
HOUSTON, TEXAS, September 23, 2004—El Paso Corporation (NYSE:EP) and DKRW Energy LLC, through their wholly owned subsidiaries El Paso Blue Atlantic US, Inc. and Sonora Pacific Mexico, announced today that they have entered into a joint agreement to develop up to 350 miles of natural gas pipeline infrastructure to be built within Sonora, Mexico by 2008. The pipelines will transport natural gas provided by Sonora Pacific LNG, a 1.3 billion-cubic-foot-per-day LNG facility proposed for Puerto Libertad on the Gulf of California.
The pipeline will initially distribute natural gas to Naco, Hermosillo, Guaymas, Ciudad Obregon, and Navojoa. An export line through Nogales, Arizona would interconnect with the El Paso Natural Gas (EPNG) interstate pipeline system at the Mexico/United States border. The natural gas would then be transported into the EPNG mainlines for further distribution in the western United States markets.
"El Paso is pleased to increase its activity in Mexico by partnering with Sonora Pacific Mexico on this project," said Stephen C. Beasley, president of El Paso's Eastern Pipeline Group. "This will be a significant North American pipeline construction project, serving important growing markets in the state of Sonora as well as the western United States."
"This agreement is an important step in the development of Sonora Pacific LNG," said Tom White, DKRW Energy managing partner for the project. "Coupled with our land purchase and the Cooperation Agreement recently executed with the state of Sonora, we are putting together the foundation of a very successful project."
DKRW's equity interest in the new Mexican pipeline system will be available to natural gas suppliers and other investors as the project proceeds. Within the next several months, DKRW plans to market throughput capacity and equity in the terminal and secure all necessary federal state and municipal permits.
"The permitting process is moving very smoothly due to our Cooperation Agreement with the state of Sonora and the veteran team of professionals we have working to secure the appropriate permits at the federal, state, and municipal levels," White said.
Initial operations are targeted for the 2008 time frame. A total of 500 million cubic feet per day (MMcf/d) of natural gas is expected to be consumed in Sonora, primarily in the power generation sector, while 800 MMcf/d is planned to be shipped to the United States. The project will positively impact air quality in the region through the conversion of 1,200 megawatts of existing residual fuel oil burning power station capacity in Sonora to cleaner-burning natural gas.
El Paso Corporation provides natural gas and related energy products in a safe, efficient, dependable manner. The company owns North America's largest natural gas pipeline system and one of North America's largest independent natural gas producers. For more information, visit www.elpaso.com.
DKRW Energy LLC is a Houston-based energy infrastructure company focused on providing new and unique solutions to 21st century energy challenges. DKRW Energy business lines include LNG, coal-to-liquids, and wind power. Additional information can be found at www.dkrwenergy.com.
This release includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The company has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release, including, without limitation, the ability to implement and achieve our objectives in the long-range plan; the timing of the completion of the internal review of the reserve revisions, and the extent and time periods involved in any potential restatement of prior years' financial results; potential impact of any restatement of financial results on our access to capital (including borrowings under credit arrangements); changes in reserves estimates based upon internal and third party reserve analyses; the uncertainties associated with the outcome of governmental investigations; the outcome of litigation including shareholder derivative and class actions related to the reserve revision and potential restatement; and other factors described in the company's (and its affiliates') Securities and Exchange Commission filings. While the company makes these statements and projections in good faith, neither the company nor its management can guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. The company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the company, whether as a result of new information, future events, or otherwise.