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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