Houston’s Midcoast Energy Resources Inc., a pipeline powerhousein the southeastern United States, tightened its grip in Alabamaafter reaching an agreement yesterday with Calpine Corp. to provideup to 276 MMcf/d in natural gas transportation services to twofacilities in Alabama.
The 20-year agreement calls for Midcoast to serve two of Calpine’snewly announced cogeneration plants: the 700 MW Decatur Energy Centerand the 660 MW Morgan Energy Center, both located near Decatur,AL. The Decatur Energy Center will be built at a Solutia Inc. chemicalfacility and the Morgan Energy Center is being built at a BP Amocochemical facility (see Daily GPI, Feb.28). Natural gas deliveries are expected to begin by the summer of2002.
The agreement calls for Midcoast to provide 138 MMcf/d in firmtransportation services for 20 years, and commits the pipelinecompany to double Calpine’s contracted firm transportation volumesunder their election within six month.
A 52-mile pipeline will be constructed near an existing MidcoastInterstate Transmission system, with the size and design capacitybased on Calpine’s election and any other indications of demandfrom third parties. When completed, the project is expected toresult in up to 400 MMcf/d of new natural gas transportationcapacity into the industrial Tennessee River Valley region.
Dan C. Tutcher, Midcoast’s CEO, said the company was excited towork with Calpine on the projects. “This is a natural extension ofour already strong presence in north Alabama, and will more thandouble our pipeline capacity along the growing Tennessee RiverValley industrial corridor.”
The Houston-based pipeline company has long enjoyed a monopolyover pipeline transportation in Alabama and throughout thesoutheast corridor of the country.
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