Columbia Energy Services and the Municipal Gas Authority of Mississippi (MGAM) signed a 10-year gas supply contract that calls for MGAM to buy 10 billion Btu/d, or about 10 MMcf/d. “This acquisition provides firm economic supplies for our participating municipal gas systems and will assist them in meeting the needs of their customers,” said Neil Davis, MGAM general manager. ” MGAM, which represents 20 public agencies, provides gas supply and related services to municipalities that own and operate gas distribution systems in Mississippi.

The deal was funded by issuance of tax-exempt bonds. It is one of an increasing flood of pre-paid deals involving government agencies which are taking advantage of both low interest rates and low gas prices. (See story above) Aquila Energy earlier this year announced a $24 million deal for 10 years with Nebraska municipals which were issuing bonds to pay for the gas. (See NGI, April 1, 1998).

“Columbia Energy is please to have the opportunity to enter into structured transactions such as the MGAM transaction,” said Phillip M. Glaessner, senior vice president of energy trading and supply for Columbia Energy. “These types of transactions demonstrate the sophistication and flexibility that Columbia energy is offering to its municipal customers. It is one of several similar long-term arrangements that Columbia Energy has entered into recently.”

Monday, Williams Energy said it signed a 10-year agreement to supply more than 16,000 dekatherms/d of pre-paid gas to Florida Gas Utility for distribution to its members, consisting of 15 Florida LDCs. Williams Energy began supplying Florida Gas Utility Dec. 1. Historically, Florida Gas Utility bought gas using short-term (less than one month) and medium-term (up to three years) contracts.

©Copyright 1998 Intelligence Press Inc. All rights reserved.The preceding news report may not be republished or redistributed, in wholeor in part, in any form, without prior written consent of Intelligence Press,Inc.