Midcoast Energy Resources has agreed to buy the Gloria pipelinesystem in southeastern Louisiana and the Bruni gathering system inSouth Texas for nearly $7.53 million from Koch Gateway Pipeline.

The Gloria system is about 133 miles of mainly 12- and 16-inchpipeline with a 1,650 hp compressor station, and includes 51 milesof gathering pipeline and 82 miles of transmission pipeline in St.Bernard, Plaquemines, Jefferson and Lafourche parishes, LA. Thesystem gathers gas from seven producing fields and directlysupplies gas to an industrial customer and a local distributioncompany in the area. The daily throughput on the system averages23,250 Mcf/d.

The Bruni system, in Duval, Jim Wells, Live Oak and San Patriciocounties, TX, is composed of 142 miles of mainly 14- and 18-inchpipeline. The system gathers gas from producing wells in the regionand provides gas supply to the local distribution company for thecities of Mathis, Orange Grove, Agua Dulce and San Diego, TX.

Both pipelines are presently part of Koch’s interstate systemand FERC must approve the systems’ abandonment from interstateservice and sale. Midcoast intends to operate both pipelines asseparate intrastate systems.

“The Gloria system further establishes Midcoast in Louisianawhere we have built a strong operating base including themid-Louisiana systems we purchased last year and the Creole systemwe purchased earlier this year,” said Dan Tutcher, Midcoastpresident. “The Bruni system will further solidify Midcoast’spresence in south Texas and serve to complement our existing assetbase there, which already includes 15 systems with over 145 milesof gathering and end-user pipeline.”

In October 1997, Midcoast acquired Republic Gas Partners LLC,owner of the Mid Louisiana Gas Co. (MIDLA), Mid Louisiana GasTransportation Co., and Mid Louisiana Marketing Co. MIDLA owns a386-mile, 22-inch interstate pipeline running from a gas field inMonroe, LA, south through Mississippi to Baton Rouge, LA. Thesystem includes two compressor stations and has throughput capacityof 200 MMcf/d. MIDLA serves Entergy Gulf States, the LDC for BatonRouge; Mississippi Valley Gas Co., the LDC for Natchez, MS;International Paper’s facility near Natchez; and Exxon’s BatonRouge Complex.

In July, Midcoast’s Mid Louisiana Gas Transmission Co.subsidiary bought the Creole Pipeline Corp. from El Paso EnergyCorp. Creole owns and operates a 44-mile pipeline near New Orleans,which has capacity of 115 MMcf/d and an average throughput of 50MMcf/d serving several large industrial customers, includingEntergy Louisiana, Domino Sugar, and Mobil’s Chalmette refinery.

Duane Herbst, Midcoast vice president of corporate affairs, saidthe company will be integrating its most recent acquisition withexisting assets.

Joe Fisher, Houston

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