Williams Energy Marketing and Trading enlarged its supplyportfolio earlier this week by inking a 20-year gas supply andpower purchase deal with a Cleco Evangeline power plant. Accordingto the deal, Williams will both supply gas (up to 150 millionMMBtu/d) to the plant and market its output. Financial terms of thearrangement were not disclosed. The plant is still underconstruction and is expected to begin operations in June.

Phil Scalzo, vice president of Williams Energy Marketing andTrading, said, “This project fits well into our Southeast powerstrategy and allows us to have a physical presence in a market inwhich we plan to build our power business.”

Williams will pay a fee to Cleco Evangeline LLC, a division ofthe Pineville, LA-based Cleco Corp., to continue operating theplant. The project is expected to add 25 cents/share to ClecoCorp.’s overall earnings in its first year of operations and 40cents/share in the following years.

“The contract capitalizes on Williams’ strengths in gas supplyand power marketing. It also allows us to provide much needed powerto our region while limiting our corporate exposure to potentiallyvolatile markets,” said Gregory Nesbitt, Cleco’s CEO.

Williams expects big things from its energy services segment aswell. The company invested more than half of its energy capitalbudget in 1999 in this area, and hopes to grow it by 15% annually.While other sectors of the Williams Cos. Inc. did not fare well inthe third quarter, Williams Energy Field Services, which includesWilliams Energy Marketing and Trading, stood out as performingadmirably (see Daily GPI, Nov. 3). For the quarter, this divisionreported third quarter profit of $135.2 million, compared withprofit of $112.4 million in 3Q98.

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