Atlanta-based Southern Company Energy Marketing, the energytrading and marketing arm of the nation’s largest producer ofelectricity, agreed in principle to manage the assets ofPan-Alberta Gas Ltd., the second-largest Canadian gas exporter.

Pan-Alberta currently markets about 1.2 Bcf/d, while SouthernCompany Energy Marketing recently has been trading about 7 Bcf/d.As part of the deal, Southern Company would assume Pan-Alberta’soffice in Calgary and integrate Pan-Alberta’s businesses with itsAtlanta trading and marketing operations.

“Pan-Alberta fits well with our strategy to expand in NorthAmerica by linking energy assets to our growing trading andmarketing operations,” said Gary Morsches, Southern Company EnergyMarketing president. “With the opening of a Southern Company EnergyMarketing office in Calgary, we intend to expand on Pan-Alberta’ssuccesses and use its existing infrastructure and expertise to helpgrow our energy business in Canada and the northern United States.”

Southern Company Energy Marketing is a joint venture of SouthernEnergy Inc. and Vastar Resources Inc. of Houston.

“This innovative arrangement provides new opportunities for ourproducer- owners, market customers and employees and crystallizesthe value of Pan- Alberta’s assets for our producer-owners,” saidRod Pocza, Pan-Alberta CEO.

If a final agreement is reached, it will be subject toregulatory approvals in Canada and the United States. Thereafter,if approved by both companies’ boards of directors, the deal wouldtake effect in the second quarter of 2000.

Pan-Alberta is owned by more than 400 western Canadian gasproducers and has nearly US$1.5 billion in sales annually.Pan-Alberta’s assets include long-term dedicated gas supplyarrangements, more than 1.2 Bcf/d of pipeline transportationcapacity and in excess of 11 Bcf of storage capacity.

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