AGL Resources subsidiary Sequent Energy Management said it has signed a three-year agreement to supply gas to and manage the natural gas transportation and storage assets of Roanoke Gas Co. and Bluefield Gas Co., two utility affiliates of RGC Resources that serve about 58,100 residential, commercial and industrial customers in Virginia and West Virginia.

“We’ve used variations of the asset management concept successfully for the past several years, and Sequent has the resources and the commitment to assist us in building upon our proven track record,” said Mike Gagnet, director of operations for Roanoke and Bluefield.

Sequent said it has access to firm transportation and storage capacity and salt dome storage in the eastern half of the United States and long-standing relationships with natural gas producers and energy marketers. The company manages an average of more than 2 Bcf/d of natural gas and that enables it to provide lower prices to its customers, said Marshall Lang, Sequent’s vice president of business development. “At a time when energy prices are increasing, companies like Roanoke and Bluefield are looking for ways to provide optimum values for their customers,” Lang noted.

In an interview with NGI, Lang said Sequent will manage about 150,000 Dth/d of transportation capacity and 3 Bcf of working storage capacity for the utilities as well as all of their gas supply purchases. “We would have access to all of those assets once we have fully supplied and supported their system requirements needs. Any additional or latent capacity would be for us to try to manage and optimize. We are returning some of the [income] from that, but it’s a fixed-fee arrangement as opposed to a revenue sharing arrangement.”

Lang noted that Sequent also manages all of the transportation and storage assets for its sister utility companies, Atlanta Gas Light, Chattanooga Gas and Virginia Gas, and will soon be doing the same for NUI’s utilties — Virginia Natural Gas, Elkton Gas and Elizabethtown Gas. AGL Resources is in the process of completing its purchase of NUI. Sequent also has a portfolio management agreement with Chesapeake Utilities, which serves the Delmarva Peninsula.

“I think you are seeing more utilities turn to companies like Sequent that [perform this kind of service] because some of the larger players may have gotten out of that business” and that has opened up opportunities for other asset management companies, he said.

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