Pacific Enterprises Wins Contract in Uruguay

Pacific Enterprises, parent of Southern California Gas Co., said Tuesday it won a contract to build and operate a natural-gas and propane distribution system in conjunction with Uruguay’s state-owned oil and gas company.

The five-year project is expected to cost $150 million to $200 million. Separate pipeline systems will be built for natural gas and for propane, bringing cooking and heating fuel to 777,000 homes and businesses across Uruguay.

“This is a major step forward [in our] business strategy in South America, which includes investing in natural gas and power distribution companies, and eventually to expand into electric generation and gas and power marketing” said Richard Farman, president and chief executive of Pacific Enterprises.

Los Angeles-based Pacific Enterprises will own 55% of the venture, and ANCAP, Uruguay’s state-owned energy company, will own up to 45%.

Union Electrica Fenosa, a Madrid utility, will help build and operate the project, although terms of its participation haven’t been worked out, said Michael Mizrahi, a Pacific Enterprises spokesman.

Pacific Enterprises was chosen for the contract over a group that included Elecnor-Electrificaciones del Norte, a Madrid-based company.

The natural-gas distribution system will be supplied from fields in Argentina through a new pipeline that will cross Uruguay’s southern border.

Pacific Enterprises also said its board declared a regular dividend of 40 cents a share of common stock, payable June 15 to shareholders of record as of May 29.

Pacific Enterprises said it accelerated its payment, as did its merger partner, San Diego-based Enova Corp., to coordinate their dividend payment schedules.