PG&E to acquire stake in Ruby Pipeline

El Paso Corporation and PG&E Corporation have entered into a letter of intent for PG&E Corporation to acquire a 25.5 percent interest in El Paso’s Ruby Pipeline project — a proposed 680-mile, 42-inch natural gas transmission pipeline that would begin at the Opal Hub in Wyoming and terminate at the Malin, Oregon, interconnect, near California’s northern border. Capital expenditures for the project are expected to total approximately $2 billion.

The Ruby Pipeline will have an initial capacity of 1.2 billion cubic feet per day (Bcf/d) and is expandable to 2 Bcf/d. It will connect Rocky Mountain natural gas producers with one of the most attractive natural gas demand regions in the country and provide natural gas users in northern California, Nevada, and the Pacific Northwest with competitively priced natural gas from the nation’s most important supply growth region.

Subject to Federal Energy Regulatory Commission and other regulatory approvals, approvals of respective companies’ boards of directors, and after obtaining necessary customer commitments, the Ruby Pipeline is anticipated to be in service in the first quarter of 2011.