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Midcoast to Supply Calpine's Plants

Midcoast to Supply Calpine's Plants

Houston's Midcoast Energy Resources Inc., a pipeline powerhouse in the southeastern United States, tightened its grip in Alabama after reaching an agreement last week with Calpine Corp. to provide up to 276 MMcf/d in natural gas transportation services to two facilities in Alabama.

The 20-year agreement calls for Midcoast to serve two of Calpine's newly announced cogeneration plants: the 700 MW Decatur Energy Center and the 660 MW Morgan Energy Center, both located near Decatur, AL. The Decatur Energy Center will be built at a Solutia Inc. chemical facility and the Morgan Energy Center is being built at a BP Amoco chemical facility. Natural gas deliveries are expected to begin by the summer of 2002.

The agreement calls for Midcoast to provide 138 MMcf/d in firm transportation services for 20 years, and commits the pipeline company to double Calpine's contracted firm transportation volumes under their election within six month.

A 52-mile pipeline will be constructed near an existing Midcoast Interstate Transmission system, with the size and design capacity based on Calpine's election and any other indications of demand from third parties. When completed, the project is expected to result in up to 400 MMcf/d of new natural gas transportation capacity into the industrial Tennessee River Valley region.

Dan C. Tutcher, Midcoast's CEO, said the company was excited to work with Calpine on the projects. "This is a natural extension of our already strong presence in north Alabama, and will more than double our pipeline capacity along the growing Tennessee River Valley industrial corridor."

The Houston-based pipeline company has long enjoyed a monopoly over pipeline transportation in Alabama and throughout the southeast corridor of the country.

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