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AGL Resources, El Paso Corp. Form LNG Venture

August 17, 2010

ATLANTA - AGL Resources Inc. and El Paso Corp. announced they've signed a joint-venture agreement to distribute liquefied natural gas (LNG) across the southeastern United States to the heavy-duty transportation market, which includes heavy-duty trucks, buses and waste haulers.

The new joint venture, Southeast LNG Distribution Co., plans to own and operate a fleet of LNG-fueled tankers and distribution facilities.

AGL Resources, an Atlanta-based energy services company, has approximately 2.3 million customers in six states. The company also owns Houston-based Sequent Energy Management, which serves natural gas wholesale customers throughout North America.

El Paso Corp., which owns a major interstate natural gas pipeline system, is one of North America's largest independent natural gas producers.

"This partnership with El Paso will play an important role in expanding the availability of clean-burning, low-cost natural gas as an alternative to diesel fuel for heavy-duty fleet use -- including long-haul trucking," said John W. Somerhalder II, chairman, president and CEO of AGL Resources. "As the largest natural gas distribution company in the Southeast based on customer count, AGL Resources is well positioned to construct and operate the distribution facilities necessary to help bring this market opportunity to fruition."

"AGL Resources and El Paso have a unique opportunity to develop this new transportation market by capitalizing on our combined LNG and natural gas infrastructure in the Southeast, our long-time relationship, and the expertise in both organizations," said Jim Yardley, president of El Paso's pipeline group.

Southeast LNG plans to provide distribution facilities and gas supply contracts to both the private and public sectors as the market develops. The company will be headed by President Bruce H. Hughes, who brings more than 30 years of natural gas pipeline experience to Southeast LNG. Hughes most recently served as director of business development with Southern Natural Gas Co., a subsidiary of El Paso Corp., where he developed natural gas supply and pipeline expansion projects across the southeastern United States.

"Approximately 25 percent of the nation's tractor-trailer traffic occurs in the southeastern U.S.," said Hughes. "We plan to develop infrastructure to fuel and service this market segment with LNG, providing significant environmental and economic benefits." 

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