Natural gas producer Sempra Energy (NYSE: SRE) said today that a subsidiary has added 7.5 billion cubic feet of natural gas storage capacity at the company's hub in Simpson County, Mississippi. The addition doubles the facility's capacity and the company plans to add another 7.5 billion cubic feet of storage at the site next year.
As the U.S. Energy Information Administration's weekly natural gas storage report has been showing for months, current gas storage facilities in the U.S. are running at near-capacity. Sempra noted that demand for gas storage is only going to grow:
As more natural gas supply comes online and liquefaction terminals move forward, customer demand for additional underground storage at strategic pipeline hubs like Mississippi Hub Storage will continue to grow.
There's really no arguing with that. The interesting point is that Sempra assumes that U.S. regulators will approve more natural gas liquefaction facilities that will, in turn, require more storage to keep the plants fed. This is very likely a reasonable assumption, but it's no slam dunk.
Sempra's shares are down about 1.2% today at $66.96 in a 52-week range of $48.38-$72.32. The growing stocks of natural gas and today's price decline are likely responsible for the share price drop.
Filed under: 24/7 Wall St. Wire, Commodities, Oil & Gas Tagged: SRE