Look for NGC to focus its efforts on growing the powergeneration segment of its energy store concept of providing gas,power and gas liquids, CEO Chuck Watson told reporters in HoustonMonday. “We are going to optimize and strategically grow our powergeneration assets. Greater than 50%, probably almost 75%, of ouravailable cash flow in this company over the next several yearswill be in power generation, either greenfield projects, merchantplants, or in possibly acquiring some of these plants that are spunoff from the utilities over the next several years.”

Watson touted the company’s efforts to acquire power plants inCalifornia, noting he was surprised NGC won bids for two of 20divested California plants. The California generation figures intoNGC’s recent buy-up of capacity on El Paso.

“In California, we bought some generation assets through Destec,again, all gas-fired. We have some indigenous Chevron [gas] supplyin California, and we’ve got some leased storage. So we’ve gotsupply, we’ve got transportation, we’ve got leased storage, andwe’ve got demand. The acquired generators are swing plants, Watsonsaid, so NGC needs the capacity flexibility it acquired on El Paso.”If you’re going to swing and make money doing it, you’ve got tohave gas supply. You’ve got to have the capability of handling thatkind of swing. We had the inherent gas supply capability, but wedidn’t have the pipeline capacity. That was the piece we weremissing, so we had to go out and get pipeline capacity. On thesurface, far in excess of what people saw that we needed.”

Additionally, the company markets about 1 Bcf/d in California.”We’re the largest marketer in California anyway, have been for along time.” Watson said those who criticized the company for buyingup the El Paso capacity didn’t realize how big NGC is inCalifornia.

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