Calpine Corp. has further bolstered its gas supply portfolio with the purchase of Highland Energy Co. from Entergy Power Gas Operations Corp. and Louis Morrison. Highland currently aggregates more than 300 MMcfe/d across major U.S. supply basins. Financial details of the transaction were not disclosed.

“Calpine will incorporate Highland’s skill set and value-added services into our Producer Services fuel procurement group and will focus their efforts on working directly with producers to bring their natural gas supply to Calpine’s power plants,” said Jeff Rawls, vice president of Calpine Producer Services.

Founded in 1987 by Louis Morrison, Highland has an established service that assists small and medium-size independent producers in the aggregation of their natural gas, crude oil and natural gas liquids. It provides value-added services such as nominations and scheduling, gas balancing, division orders, royalty distributions, taxes, contract administration and well connects.

With this acquisition, Calpine Energy Services, the trading, fuel management, structuring and power marketing arm of the company, will add third-party wellhead production to its portfolio of purchased fuel supply for its power plants. More than 30 employees including marketers, producer service representatives, accountants and technical specialists will join Calpine.

“This is the next step toward becoming a nationwide full-service producer services group,” said Rawls. “Because we have access to capital, operations and structuring, the producers will be able to expand their own businesses by delivering gas to a fully integrated company.”

Calpine has been active this year in growing the fueling arm of its gas-fired power generation business. It has about 2 Tcf of gas reserves with a goal of having 6.7 Tcf in its portfolio by the end of 2005 to support an almost exclusively gas-fired fleet of plants totaling 70,000 MW of output. The company bought Canadian producer Encal Energy for $869 million in February and bought another 236 Bcf of reserves through two purchases totaling $355 million during the summer — one in the San Juan Basin in New Mexico and the other in South Texas. Calpine maintains its long-standing goal of having 25% of its natural gas requirements provided from the company’s own sources. Its current gas reserves are located in Western Canada, Northern California, the Gulf of Mexico, Texas Gulf Coast, Colorado and Louisiana.

To date, the company has 37,700 MW of baseload capacity and 8,000 MW of peaking capacity in operation, under construction and in announced development in 29 states, the United Kingdom and Canada.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.