Gas Co. Plans $40-Million Pipeline Expansion

Southern California Gas Co., responding to the surge in demand for natural gas that has been at the heart of the state’s power crisis, today plans to announce a $40-million expansion of its core gas transmission system in the state.

The division of San Diego-based Sempra Energy is expected to expand its so-called Kramer pipeline system northeast of the Los Angeles area by 6%. That, together with separate modifications to the system announced in March, will increase the system’s transmission capability by 11% overall.

Once the expansion is completed by year’s end, Southern California Gas will be able to ship an additional 200 million cubic feet of gas per day through its system. That’s enough to serve 1.4 million households a day, or to support three 500-megawatt power plants generating enough electricity to serve more than 1 million households.

The company’s move is the latest industry effort to add capacity to California’s strained natural gas market, where demand has outpaced supply and has sent prices soaring.

“We’ve had unprecedented demand on our system the last six months,” Lee Stewart, president of Southern California Gas’ energy transportation services unit, said Monday.

Earlier this month, Calpine Corp. and Kinder Morgan Energy Partners said they planned to build a $1.7-billion pipeline that could deliver natural gas to California starting in 2003. Calpine is a San Jose-based power generator, and Kinder Morgan is a Houston-based natural gas pipeline company.

Constrained pipeline capacity and rising demand have sent natural gas prices soaring nationally and, in particular, at California’s borders.

That boosted winter home heating bills here while contributing to record electricity prices, given the state’s reliance on gas to fuel power plants.

Under Southern California Gas’ expansion, the utility will build a 32-mile pipeline to link its transmission station in Adelanto with the large Kern-Mojave pipeline to the north that is owned by Williams Cos. and El Paso Natural Gas Co., a unit of El Paso Corp.

The connection with the Kern-Mojave pipeline would be at Kramer Junction, where U.S. 395 and California Highway 58 intersect in northwestern San Bernardino County.

Stewart said the expansion does not require approval of the California Public Utilities Commission or the California Energy Commission.

Southern California Gas serves 5 million customers more than 23,000 square miles of Southern and Central California.