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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