Gateway

Koch Gateway has planned maintenance for today and Friday forits Index 129 segment (West 30-inch mainline in East Texas). Exceptfor gas received and delivered south of Mile Post 98.33 (Koch’sColorado River crossing near the Wharton/Fort Bend County line),all other receipts south of 98.33 will be scheduled to zero.However, at shippers’ request, up to a total of 233,000 MMBtu/d ofdeliveries (the pipeline’s total firm obligation from the area)will be kept whole.

FERC yesterday ruled that Koch Gateway Pipeline failed to meetthe burden of proof in its request for market-based rate fortransportation services, causing it to reverse a 1997 initialdecision by an administrative law judge.

Midcoast Energy Resources is buying two short pipeline systemsfrom Koch Gateway to serve new demand for marketing andtransportation in the Baton Rouge, LA, area. The systems will beacquired by Midcoast’s wholly owned subsidiaries, Mid Louisiana GasCo. (MLG) and Mid Louisiana Gas Transmission Co. (MLGT) for $2.6million cash. Midcoast will assume operations June 1, with closinganticipated during the third quarter, subject to approval by theFederal Energy Regulatory Commission and appropriate Louisianaagencies.