The California-based company says it knows how to capitalize on opportunities for pipeline projects and expansion.

Sempra Pipelines and Storage says its unique position as a small company backed by its Fortune 500 parent company Sempra Energy gives it both the agility and the financial resources to act quickly when it sees an opportunity. The company is also distinguished by its integrated strategy, according to Vice President of Development Ryan O'Neal.

"As a company, we prefer to connect our assets into an integrated infrastructure play," he says, noting the San Diego-based company is working on several developments designed to link natural gas pipelines, storage facilities, liquefied natural gas (LNG) receiving terminals and commodities trading operations.

One such development is a sister company's Cameron LNG, a receipt terminal under construction on the Calcasieu Channel in Cameron Parish, La. The proposed 36-mile Cameron Interstate Pipeline will eventually link Cameron LNG with up to seven intrastate and interstate pipelines that transport natural gas to markets in the Midwest and Northeast United States, the company says, along with Liberty Gas Storage, a storage facility under construction in Calcasieu Parish, La.

In Baja California, Mexico, the company is building an expansion to its 145-mile Gasoducto Bajanorte project. "There will be three different pipelines moving more than 1 billion cubic feet a day," O'Neal says. The project will serve power plants and industrial customers in Baja California and Southern California.

A planned expansion will also carry natural gas from Energía Costa Azul, an LNG terminal under construction in Baja California, and will link to a gasification terminal. "It all works together as a large infrastructure play," he adds. "I think that is unique in our industry." Gasoducto Bajanorte is scheduled to be operational in the third quarter of 2007.

American Expansion
Most of Sempra Pipelines and Storage's operations are in Mexico and South America, but that's due to change. "Our projects are just coming through the construction stage in the United States," he says.

The company operates pipelines in Baja California and manages natural gas and electricity distribution assets in Argentina, Chile, Mexico, Peru and the United States. "We're about to finish Liberty Gas Storage, which will be commercially operational at the beginning of next year," O'Neal says. The 17 billion-cubic-foot (bcf) storage facility's location will allow it to cater to a market where production declines have created added demand for natural gas, the company notes.

"The ideal site allows Liberty Gas Storage to provide an added degree of deliverability and supply/demand balancing to liquefied natural gas shippers, producers, local industrial end-users, distribution companies and others in the market," it adds.

Liberty's capacity will allow for a maximum injection of 500 million cubic feet per day and withdrawals of one bcf per day. "Liberty is coming online early next year," O'Neal says, adding the facility is Sempra Pipelines & Storage's first North American storage project.

New Opportunities
Sempra Pipelines and Storage is partnering with Kinder Morgan Energy Partners and ConocoPhillips on a $4.4 billion natural gas transportation system stretching from the Rocky Mountains to the eastern United States. The project, known as the Rockies Express, is a reaction to changes in the production of natural gas in North America, O'Neal explains.

O'Neal says that recent increased activity in the energy infrastructure industry has made it more difficult to acquire labor and materials than in previous years. "The natural gas industry is probably a victim of its own success," he says. "We have become so successful at getting large projects off the ground that we have taxed the system." Construction and engineering firms are finding it difficult to keep up with the number of pipeline projects in North America.

The Rockies Express is a 1,663-mile pipeline from Wyoming to Clarington, Ohio. "[Its capacity] is 1.8 bcf per day," O'Neal says. A proposed eastern extension of the pipeline would stretch all the way to the Atlantic states. "It will receive gas from basins throughout the Rocky Mountain region and move it to major markets as far as eastern Pennsylvania," O'Neal says.

Relying on Relationships
That shift isn't stopping Sempra Pipelines and Storage from continuing to explore its options in the Gulf States. Although contractors and engineers are finding plenty of pipeline construction work, O'Neal says, the company is able to find partners thanks to the solid relationships it has built.
"We try to rely on our relationships to be able to continue with our plans," he says.

Identifying Opportunities
O'Neal says the company's affiliation with Sempra Energy has given it the ability to continue to pursue new opportunities. "I think we're opportunistic," he says. "That's a good characteristic. We identify an opportunity and we move on it. "While we are still a fairly small company, we have the large corporation behind us. We have the financial opportunity to go after these projects."