Sempra Energy (SRE) announced that its natural gas storage capacity is enhanced by 5 billion cubic feet (Bcf) with the commissioning of the Cavern 4 at Bay Gas Storage facility in Alabama. The expansion of the facility was undertaken by the company’s business unit Sempra Pipeline and Storage.
Sempra’s natural gas storage facility, Bay Gas Storage, had a storage capacity of 11.4 Bcf, which was increased to 16.4 Bcf when Cavern 4 was pressed into service. The company is planning to further increase the storage capacity of this facility by another 5 Bcf, by bringing Cavern 5 into operation, which is presently under construction.
The company is gradually increasing the storage capacity of Bay Gas Storage due to its strategic location in the high-demand Florida market with markets across the Southeast, Mid-Atlantic and Northeast regions. The company is planning to bring Cavern 5 into service from 2012.
The enhanced storage capacity will benefit Sempra Energy as Bay Gas Storage, a part of Sempra Pipeline and Storage, has direct pipelines interconnection with major interstate pipelines, which includes Florida Gas Transmission, Gulf South pipeline and Transco’s 4A lateral, allowing the company to access upstream supplies, LNG imports and downstream markets in the Southeast, Northeast and Mid-Atlantic.
Sempra Pipeline and Storage presently has a storage capacity of 23 Bcf, which will be gradually increased to 75 Bcf over the next four years. During the second quarter 2010, net earnings from this unit of Sempra were $39 million versus a net loss of $27 million in the year-ago quarter.
The adjusted earnings of Sempra Energy at the end of second-quarter 2010 were 89 cents per share compared with 80 cents per share in the year-ago comparable period. The Zacks Consensus Estimates for third quarter fiscal 2010, fiscal year 2010 and fiscal year 2011 are $1.08 per share, $3.70 per share and $4.40 per share, respectively.
Sempra Energy currently retains a Zacks #3 Rank (short-term Hold rating). We also maintain a Neutral rating on the stock.
Based in San Diego, California, Sempra Energy, along with its subsidiaries, engages in the development of energy infrastructure, operation of utilities and provision of energy-related products and services to its worldwide consumers.
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