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KN Marketing Signs Gas Management Deal

KN Marketing Signs Gas Management Deal

Continuing a flurry of activity since its proposed merger with Sempra Energy fell through (See related story), KN Energy was at it again Friday as its marketing affiliate, KN Marketing, announced it was selected to provide gas and fuel management services to a 600 MW power plant in Elwood, IL. KN will supply 10 Bcf/year to this plant at an undisclosed price. The Colorado-based company will also manage the plant's fuel service, including supplying, balancing and managing storage and transportation.

"The high efficiency and flexibility of gas-fired generation represents a major growth opportunity for KN and our industry. The Elwood Plant is one of several growth projects we're pursuing to leverage off our NGPL pipeline, which extends through areas of the Midwest that are experiencing increased economic development and, in turn, increased power demand," said Doug Schantz, executive vice president of commodity marketing for KN.

KN said the NGPL pipeline will be used to transport gas to the plant. The Elwood Energy facility, owned by a joint venture between Peoples Energy Corp. and Dominion Resources called Elwood Energy LLC, is located about 60 miles southwest of Chicago. In April, multi-year contracts were signed for 100% of the facility's electric power generation.

Steve Salato, vice president of KN Marketing in the Midcontinent region said a main advantage of this deal is that it might lead to others like it. "KN's role as fuel manager for one of the first merchant power projects positions us well to exploit similar opportunities in this high-growth industry segment."

The Elwood Energy facility will begin commercial operations in July 1999. It is one of the state's first merchant power stations.

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