Almost two weeks after Williams and Duke Energy announced they wereacquiring The Coastal Corp.’s yet-to-be-built 744-mile GulfstreamNatural Gas System (pipeline), Coastal reported that it has enteredinto a $310 million purchase agreement with Berg Steel Pipe tomanufacture and deliver almost all of the steel piping needed forconstruction (see Daily GPI, Nov. 20).

In keeping with CEO David A. Arledge’s promise that Coastal willkeep Gulfstream on schedule until the sale is complete, Berg willconstruct and deliver all of the 36-inch diameter pipe required forthe offshore section under the Gulf of Mexico as well as theentirety of the 36-inch and 30-inch diameter pipe needed for theonshore section in Florida. The Europipe GmbH subsidiary won thecontract based on the results of a competitive bidding process.

“The signing of this purchase agreement with Berg represents amajor milestone in the development of the Gulfstream Natural GasSystem and keeps the project on track for meeting its targetedin-service date of June 2002,” said Arledge. “In addition, ourselection of a competitive Florida supplier brings substantialeconomic benefits to the state as well.”

Berg said production on the pipe will begin immediately, withsections being delivered to Port Manatee, FL, and Mobile, AL,beginning in early 2001. All of the pipe is expected to bedelivered by September 2001.

Traveling from Mobile, AL, across the Gulf of Mexico to ManateeCounty, FL, the Gulfstream pipeline will deliver about 1.13 Bcf/dof natural gas into Florida from sources in Alabama andMississippi. Once the line makes landfall in Florida, 292 miles ofmainline and laterals will transport the gas to natural gas-firedelectricity generating plants across the state.

Coastal, which expects to complete the sale of its 100% interestin the Gulfstream project to Duke and Williams during the fourthquarter has already signed 10 nonaffiliated utility and powerproduction customers to long-term, binding agreements for most ofthe systems’ capacity. The system is expected to be up andoperational by June 2002.

In related news, the Coastal and El Paso Energy merger that wasfirst announced on Jan. 18 is still on schedule, Coastal said.Pending various approvals, the union is set to close during the fourthquarter of this year (see Daily GPI, Jan. 19).

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