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Panda Energy Inks Transportation Agreement

Panda Energy Inks Transportation Agreement

El Dorado, AR is about to become much bigger and brighter on the map. Dallas-based Panda Energy International has moved one step closer in the process of creating what will be the largest natural gas-fired power plant in the country. Panda announced that it has secured transportation to meet the plant's daily natural gas needs.

Panda Energy's affiliate Union Power Partners, and its pipeline affiliate, Trans-Union Interstate Pipeline, have signed a transportation and interconnection agreement with El Paso Field Services' subsidiary, Gulf States Pipeline. Union Power Partners has also signed firm transportation agreements with Tennessee Gas Pipeline, a business of El Paso Energy.

The 2,720 MW plant is to be fed by a 42-mile, 30-inch pipeline that Trans-Union would build. The line would connect the El Dorado plant and the Gulf States Pipeline in Sharon, LA. Union Power Partners will be able to access gas basins in Texas, Louisiana, and Oklahoma. The Federal Energy Regulatory Commission has had the necessary filings since Dec. 1999, and a ruling on the proposed line is expected later this summer. (see Daily GPI, Feb. 24)

Located on a 310-acre site, the plant will be near the Entergy Corp. system and a 500 kv switching station. This arrangement will allow Panda to sell power to markets in Louisiana, Texas, and Arkansas.

Expected to be completely on-line in the spring of 2002, the new plant will receive deliveries of 430,000 MMBtu/d. These agreements, are a "critical link" in the foundation of getting the plant up and running, said Panda CEO Robert W. Carter. "Reliable delivery of fuel is one of the most important aspects of this, and any other, power plant." Carter explained that there would be an average of 700 workers, with a peak of 1,200, working during the construction phases of the plant. Once the plant is fully operational, there will be a full-time staff of about 65 people. The estimated total cost of the plant is in excess of $400 million.

The need for this plant is evident; the area was plagued by brownouts last summer, and most of what the region has running for power generation are aging coal and oil units. "We are pleased to enhance our strong relationship with Panda by providing the primary natural gas delivery service to their new El Dorado power plant," said Robert G. Phillips, president of El Paso Field Services.

Alexander Steis

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