Mid Louisiana Gas Transmission Co. (MLGT), a wholly ownedsubsidiary of Midcoast Energy Resources Inc., made a gas processingagreement with Exxon Company USA and plans to construct a newpipeline to supply up to 80 MMcf/d of gas to the Exxon Baton RougeGas Plant. MLGT will construct an eight-mile 14-inch pipeline forabout $3.5 million. The pipeline will connect the inlet of theBaton Rouge plant with the Florida Gas Transmission Co. Chacahoulalateral. Exxon has agreed to make available 80 MMcf/d of gas plantcapacity to process gas supplied by MLGT and Exxon through MLGT’snew pipeline. The new system will also interconnect with anexisting MLGT pipeline at the outlet of the plant. MLGT plans tobegin initial deliveries before year-end.

“This agreement is a further demonstration of the growing baseof internally generated, grass roots projects which Midcoast hasdeveloped,” said Midcoast CEO Dan Tutcher. “We are excited to havethis opportunity to further broaden our relationship with Exxon inthe South Louisiana area where we already provide natural gasservices to their Baton Rouge complex and cogeneration facility.This new system, will also serve to provide a new, reliable, lowercost source of supply for customers on our existing MLGT pipelinesystem.”

Midcoast is a Houston-based pipeline company with regionaloffices in Texas, Alabama, Louisiana, Mississippi and Alberta,Canada. The company transports, gathers, processes and markets gasand other petroleum products through more than 75 company-ownedpipelines covering about 2,700 miles in nine states, the Gulf ofMexico and Canada.

Mid Louisiana Gas Transmission has been growing its presence inthe Gulf region for a while. In July 1998, the company announcedthe purchase of the Creole Gas Pipeline in southern Louisiana fromEl Paso Energy for an undisclosed amount (see NGI July 6, 1998).The purchase of the 44-mile pipeline, which has a capacity of115,000 Mcf/d and an average throughput of 50,000 Mcf/d, was partof Midcoast’s on-going effort to increase its presence in theLouisiana transportation market. The pipeline, which is locatednear New Orleans, serves several large industrial customers,including Entergy Louisiana Inc., Air Products & Chemicals,Murphy Oil, Domino Sugar and Mobil Oil’s Chalmette refinery.

Midcoast acquired the 386-mile Mid Louisiana interstate system,which runs from the Monroe gas field in northern Louisiana to BatonRouge, as part of a merger transaction with Republic Gas Partnersin November 1997.

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