Gas companies are expected to spend billions of dollars to buy back gas plants and to sell more of the fuel they produce.
Coronado Coal Corp. and Southern California Gas Co. said in a joint announcement on Tuesday that they are in discussions to buy or lease up to 50 million cubic feet (Mcf) of gas each year.
Both companies said they would invest $5.3 billion into gas facilities over the next four years.
The purchases would be made at current prices.
The company, which has said it is in the midst of a $100 billion plan to retire nearly 100 million Mcf, is investing $1.5 billion in gas production and $3 billion in energy efficiency projects.
Southern California Gas is investing an additional $1 billion in its gas production over the same time period.
The two companies are planning to invest about $2.2 billion each over the coming four years in gas-fired power plants, which are generating the majority of California’s electricity.
In a news release, Southern California said it would buy up to 3.5 million Mf in gas plants over the course of the next five years, including a total of 732 megawatts.
Southern California is buying gas from Chevron Corp., which operates a number of large gas plants in Southern California, including those in San Diego, Los Angeles and San Bernardino counties.
Chevron also has a 30-year contract to supply gas to Southern California for about $5 billion, which is part of a larger contract to buy gas from the state for $3.2 bn over a 10-year period.