Cabot LNG, the largest U.S. liquefied natural gas importer anddistributor in the Northeast, agreed yesterday to sell 100% of itsassets to Tractebel of Brussels, Belgium for $680 million. The dealwill give Tractebel the LNG terminal in Everett, MA, along with 10%interest in a liquefaction facility in Trinidad and Tobago and theLNG tanker, Matthew. The transaction is set to close by thebeginning of September.

For Tractebel, which already has a relatively large foothold inthe United States as the operator of 20 U.S.-based power plants in12 states, the acquisition of the Cabot Corp. subsidiary providesit with a 20% share of the Atlantic basin, allowing it to serve thepower industry in the Northeast and Mid-Atlantic corridor. The dealalso complements TEMI, Tractebel’s North American energy tradingarm, which is active in the Boston region. Most important, however,is the base that it gives Tractebel to grow in North America.

“We have a fairly aggressive business plan and this is notnecessarily the last purchase we will make along these lines,” saidPhilippe vanMarcke, who heads up Tractebel’s mergers andacquisitions division as well as its strategic activities. He toldNGI that Tractebel plans to concentrate its future growth along the”Boston-to-Richmond” corridor, and also extend its reach into Texasand states in the Southwest. “We plan to concentrate our growth inthose two areas.”

VanMarcke said no changes will be made in the Boston office, andsaid that, in fact, Tractebel is looking forward to using CabotLNG’s expertise to continue on its present record of success.

“Our policy is to be multi-domestic,” he said. “We (Tractebel)have no specific skills in LNG, and we will rely on Cabot to giveus their skills. I see no changes at the present time, and in fact,would say that the employees should expect a rosy future.”

A rosy future definitely awaits Tractebel if Cabot LNG’s presentsuccess is indicated. It received 44 cargoes at its Everettterminal in 1999, up from 18 in 1998, and it expects a 10% to 20%increase in import volumes this year. It has been running at 60% to70% of capacity.

Earlier this year, Sithe Energies Inc. agreed to a 20-year gassales and purchase plan valued at more than $4 billion to feed its1,600 MW Mystic Station in Everett with LNG imported by Cabot (seeDaily GPI, Jan. 25). Just this week,Cabot LNG began deliveries to Puerto Rico’s new EcoElectrica powerfacility under a 20-year agreement. The 507-MW natural gas-fired powerplant is designed to generate as much as 20% of Puerto Rico’selectricity demand. Last year it reactivated its LNG carrier Matthew,and a few months later it began receiving LNG deliveries from theAtlantic LNG export facility in Trinidad, contracting for nearly 240MMcf/d of LNG, equivalent to 60% of the plant’s design capacity.

Cabot LNG — and now Tractebel — isn’t the only one tobenefit from the growing marketplace. The U.S. Department of Energyreported last year that LNG imports were up 56% to 39 Bcf in thefirst quarter of 1999 compared to the previous year (see Daily GPI,July 15, 1999).

In April, CMS Panhandle Pipe Line Co.’s Christopher Helmsestimated that LNG use could take up to 3.5% of the predicted 30Tcf of gas demand by 2010, and said his company is looking to buildLNG trade to the same level as crude oil trading, with LakeCharles, LA serving as the hub for all operations (see Daily GPI,April 27).

Other LNG players are on the horizon, too. Sonat, an El PasoEnergy subsidiary, successfully petitioned FERC to re-open the ElbaIsland LNG import terminal in Georgia. It expects to reactivatethat terminal in 2002. In May, Williams Gas Pipeline boughtColumbia Energy’s Cove Point LNG in Lusby, MD for $150 million (seeDaily GPI, May 4), and Williams plans to reopen the terminal alsoby early 2002.

LNG accounted for about 1% of the U.S. total gas consumption,about 60 Bcf/d, last year, but some predict it could grow tobetween 5% and 8% if the four existing plants are expanded.

Cabot LNG is a division of Cabot Corp., and is the only activeimporter and distributor of LNG on the East Coast. Through itssubsidiary Distrigas, Cabot LNG imports from Algeria and Trinidadto its marine terminal, and then distributes the gas to utilities,electric power generators, gas marketing companies and industrialend users in New England. It supplies about 20% of the New Englandgas demand, but it also was in the process of increasing itscapacity.

“In the present market circumstances, this acquisition willcontribute positively to Tractebel’s results from the outset,” saidTractebel CEO Jean-Pierre Hansen. “The integration of Cabot LNGwill create synergies with the existing LNG and natural gasoperations within our group.”

Tractebel, which operates as the sole energy arm of French-basedSuez Lyonnaise des Eaux, provides all of the corporation’s energyactivities, including electricity and gas, energy services,engineering and technical installations and waste management, andit has 70,000 employees worldwide. It has about 46,000 MW of powergeneration either already installed or at an advanced state ofdevelopment, and 30,000 MW is outside of Belgium. It also operatesgas transport networks in Europe, Latin America and Asia.

©Copyright 2000 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.