MCN Energy Group Inc. is selling its 35% interest in Jonah GasGathering Co. to Green River Pipeline, LLC — a move top MCNofficials say is related to the company’s desire to focus attentionon its Midwest-to-Northeast region. Green River, MCN’s partner,will pay $45 million in exchange for the stake in the venture.

Discounting speculation that the sale is related to MCN’spending merger with DTE Energy Co., MCN Chairman and CEO Alfred R.Glancy III said it was in line with a decision made in 1999 tofocus on its core region.

“Although the Jonah system has been an increasingly profitableventure, we saw an opportunity to sell a non-core asset at anattractive price,” Glancy said. In the short term, Glancy said, MCNwill “sacrifice about $3 million per year of expected net incomedue to the sale, net of reduced interest expense,” but he said thatin the long run, the sale would help on current projectinvestments. MCN’s second-quarter gain of nearly $25 million inpre-tax earnings is subject to review by the Hart-Scott-Rodinoantitrust law.

Jonah Gas Gathering owns and operates a pipeline system thatcurrently gathers 340 MMcf/d of natural gas within the Jonah fieldin Sublette County, WY. MCN and McMurry Oil Co., the lead partnerin Green River, originally developed the field and the gatheringsystem, and it has undergone extensive growth because of increasedgas production there.

In April, MCN completed the sale of its 50% interest in theMichigan Power and Ada Cogeneration projects. Those sales,according to Glancy, were “an important step” in its merger withDTE. MCN announced its merger with DTE in October 1999 which, ifapproved, would create the largest electric and gas utility inMichigan and one of the Midwest’s top energy providers.

MCN Energy Group Inc. is an integrated energy company with morethan $4 billion of assets and approximately $2.5 billion of annualrevenues.

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