BP Energy Co. has signed an agreement in principle to lend itsextensive supply expertise, marketing and trading knowledge,financial products and information technology to a strategicalliance with the four Energy East Corp. distribution companies inNew York and New England, the companies said Thursday.

The alliance will contribute additional expertise to natural gasacquisition, optimization and supply management for New York StateElectric & Gas, Connecticut Natural Gas, Southern ConnecticutGas and Berkshire Gas.

The Energy East companies will continue to own their natural gasdistribution assets and will contribute off-system sales knowledge,load information, city gate management and regulatory insight tothe alliance. BP Energy, the natural gas and power trading andenergy management business for BP in North America, will add thesupply-side expertise.

“This new relationship with one of the premier energy companiesin North America will supplement our existing expertise and takeour capabilities to a new level,” said Denis Wickham, Energy East’ssenior vice president-transmission and supply.

“The Energy East-BP alliance is a great fit of skills and assetsin a strategic energy market – the Northeast,” said OrlandoAlvarez, vice president of BP Energy’s East Region.

The Energy East companies will make the appropriate regulatoryfilings, seeking approvals as required. The agreement is the endresult of a process begun by Energy East’s natural gas companies inJanuary to explore economical alternatives regarding natural gassupply and to enhance the benefits of a larger natural gasportfolio as a result of the Energy East mergers that werecompleted last year. The alliance is based on sharing incrementalsavings. Energy East is a super-regional energy services anddelivery company serving 2 million customers (1.4 millionelectricity and 600,000 natural gas) in upstate New York and NewEngland. Energy East also announced a strategic combination Feb. 20with RGS Energy Group, the parent company of Rochester Gas andElectric Corp.

BP, the largest natural gas producer and reserves holder inNorth America, .produces around 4 Bcf/d and sells more than 10Bcf/d in North America.

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