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Sempra Inks Optimization Deal with Connecticut Gas

February 1, 1999
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Sempra Inks Optimization Deal with Connecticut Gas

Significantly increasing its presence in the Northeast, Sempra Energy's marketing arm, Sempra Energy Trading, agreed Thursday to manage the supply and delivery of gas to serve Southern Connecticut Gas Co.'s 158,000 customers. Terms of the one-year agreement were not disclosed. Sempra will begin April 1.

"By helping Southern Connecticut improve its service, we will be more able to help our own East Coast customers. The East Coast has, is, and always will be one of our company's main focus areas." Sempra said. The company declined to say if similar deals were on the way.

Sempra will manage and optimize transportation and storage contracts with Algonquin Gas, Texas Eastern, Tennessee Gas, Iroquois, CNG, Transco, and National Fuel. It will manage about 37 Bcf of supply, 4 Bcf of storage capacity and 162 MMcf/d transportation capacity. The contract excludes Southern Connecticut's LNG and propane peaking facilities.

"Working with a major national entity in the energy trading market, our contract with Sempra Energy Trading gives us the strong potential to produce cost savings for our customers and increased value for shareholders," said Sal Ardigliano, a Southern Connecticut spokesman.

Ardigliano views this move as a step to the next level. "We've been doing this with our storage capacity for about four years." Over that span, Southern Connecticut worked with companies such as TPC, and Dynegy. "We had success," Ardigliano continued, "and now it's time to put all the assets into the pot." He also said Southern Connecticut chose Sempra because it cleared all the hurdles during the selection process, including proven reliability, ability to work cooperatively, as well as extensive savings results. He said the one-year deal is an evaluation period, and there is no guarantee Southern Connecticut will re-sign with Sempra for another contract. "We don't make deals for eternity with anybody. Competition is too much of a good thing."

The agreement still requires approval from the Connecticut Department of Utility Control, but Southern Connecticut expects it to be done before the April 1 start date.

John Norris

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