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Engage, Southern Enter into Conversion Deal

Engage, Southern Enter into Conversion Deal

Under a five-year tolling agreement announced last week with Houston-based Engage Energy, Southern Company Energy Marketing has agreed to convert natural gas supplied by Engage into 300 MW of electricity. The agreement allows Engage to sell the electricity following its conversion, which will be done at a power plant currently under construction in Zeeland, MI. The plant, being constructed by Southern Company Energy Marketing's parent, Southern Energy, is expected to begin operations by mid-2001.

"The purchase of this tolling capacity from Southern Company Energy Marketing supports Engage's objective of acquiring strategic resources in core market regions," said Engage CEO Clark C. Smith. "This capacity will enhance Engage's ability to customize power and natural gas products in Michigan and the upper Midwest markets."

Atlanta-based Southern Energy began constructing the natural-gas fired plant in Zeeland in May, and it will use advanced natural gas combined-cycle technology and state-of-the-art emission control equipment (see NGI, May 15).Initially, it will have 300 MW of capacity, and an additional 530 MW will begin commercial operation by June 2003. Semco Energy plans to build the natural gas line to serve the facility, connecting the plant with ANR Pipeline's interstate mainline system.

When the Zeeland plant begins operation, along with another 550-MW plant in Arkansas currently being constructed, Southern Energy will top more than 10,000 MW in power-generation capacity it owns or controls in the United States. The company develops, builds, owns and operates power production and delivery facilities, and also offers other services to utilities and industrial companies worldwide.

Engage is a joint venture of The Coastal Corp., based in Houston, and Westcoast Energy Inc. in Vancouver, BC. It offers natural gas and electricity sales and trading services, energy management, structured storage and transportation services, power management and energy risk management services.

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