Southern California Gas could begin injecting natural gas into the Aliso Canyon storage facility in September, CEO Dennis Arriola said Thursday during an earnings conference call with analysts.
All of Alison Canyon's 114 wells have cleared the first phase of inspection and 17 wells have cleared a final round of testing, Arriola said.
SoCal Gas, the Sempra Energy subsidiary that operates Aliso Canyon, may later this month ask the California Conservation Department's Division of Oil, Gas and Geothermal Resources for permission to begin injections at the cleared wells, he said.
DOGGR and the California Public Utilities Commission will have to find that the Aliso Canyon field is safe before the injections can go ahead.
Potentially, SoCalGas could begin using up to 25 wells next month, Arriola estimated.
Some 17 power plants in the Los Angeles basin totaling 9,838 MW of capacity are affected by the Aliso Canyon shutdown.
Aliso Canyon still has 15 Bcf following the leak that can be used to meet reliability needs.
Earlier this year, the California Independent System Operator and others estimated the facility's effective shutdown exposes Southern California to up to 14 days of power outages this summer. So far, there have not been any power outages.
Sempra on Thursday increased its cost estimates for the four-month Aliso Canyon leak to about $717 million, up from $665 million three months ago, with about 70% of the cost related to relocating residents who lived near the facility. About 180 lawsuits have been filed related to the Aliso Canyon leak.
The costs also include mitigating the 4.62 Bcf that leaked from Aliso Canyon, largely by reducing methane emissions at dairy farms in southern California.
SEMPRA PLANS MEXICO INVESTMENTS
Meanwhile, Sempra continues to see opportunities in Mexico, which is seeking major investments in its energy infrastructure to support a growing manufacturing base, according to Debra Reed, Sempra chairman and CEO.
Sempra subsidiary IEnova, the largest private energy company in Mexico, in July agreed to pay Pemex $1.1 billion for the Mexican state-owned oil company's 50% stake in several pipeline assets.
IEnova already owned the other half of the assets and Reed expects the deal to close by the end of the third quarter. The assets include three gas pipelines, an ethane pipeline, and a LPG pipeline and associated storage terminal.
In June, a joint venture between IEnova and TransCanada won a $2.1 billion deal to build and own a roughly 500-mile gas pipeline from near Brownsville, Texas, to Tuxpan in Veracruz.
IEnova will spend about $840 million on the project, according to Reed. The project has a 25-year transportation contract with the Comision Federal de Electricidad. Sempra expects the pipeline to operational in late 2018.
IEnova is also preparing to bid into a request for proposals for renewable energy set to be held in September, according to Reed.
Also, Sempra plans to sell its 625-MW Termoelectrica de Mexicali gas-fired power plant, which sells power into California, by the end of the year, the company said in a quarterly report filed with the US Securities and Exchange Commission Thursday.
SEMPRA EYES GULF COAST STORAGE PROJECTS
Sempra is also considering building gas storage facilities and related pipelines to support the growing LNG sector and manufacturing along the Gulf of Mexico coast, according to Reed.
"As LNG facilities come online the need for storage will become apparent," Reed said.
In the past year, there has been some upward movement in the price of storage, according to Reed, who said she expects storage prices to increase as more load comes online.
The Cameron LNG export facility, which Sempra is building in Louisiana as part of a joint venture, is about halfway finished and expected to be operational in 2018, according to the company. The facility is designed to export 1.7 Bcf/d.
