Aquila is beefing up is high deliverability gas storage holdingsin the Gulf Coast region in preparation for serving growinggas-fired power generation demand. The company bought rights to theproposed Houston Energy Center, a greenfield, natural gas saltcavern storage project being developed by SG Resources of Houston,Inc. The sale price was not disclosed.

The storage facility, which will be located in Liberty County,TX, about 30 miles northeast of Houston, will become operational in2002, and by 2004 will have 12 Bcf of working gas capacity. It isexpected to have direct interconnections to four interstate andthree intrastate pipelines and will be designed so that 100% of itsinventory can be delivered in 10 days.

SG Resources also sold 168 acres to Aquila that couldaccommodate as many as five additional caverns each capable ofholding 8 Bcf of working gas capacity, and that could accommodateseveral new power generation facilities.

Houston-based SG Resources said it currently is developing threeother salt cavern storage facilities in undisclosed locations

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