Yankee Gas Services Co. the local distribution arm of YankeeEnergy System Inc., has reached an agreement for TransCanada GasServices Inc. (TCGS) to supply gas, pipeline capacity and storageoptimization for three years. Yankee Gas is the largest LDC inConnecticut, delivering more than 50 Bcf of gas annually to 68communities and 183,000 customers.

“This type of arrangement represents a sensible alternative toYankee Gas operating an in-house trading organization,” said ThomasJ. Houde, Yankee vice president of rates and resource planning.”Both Yankee Gas and its customers will benefit from the increasedoperational flexibility and savings that this deal will provide.”

Under the agreement, TCGS will use approximately 2.8 Bcf ofstorage on the Tennessee and National Fuel pipelines, as well as55,000 MMBtu/d of Tennessee capacity and associated gas supply.TCGS will also meet Yankee’s full fuel requirements for gas supplydelivered on the Tennessee pipeline from the Gulf Coast region.

“This deal is a logical extension of our development strategy inthe Northeast over the last year, which has seen TCGS double itsbusiness to over one Bcf/d,” said Mark Brown, vice president ofmarketing/northeast region, for TCGS.

Yankee Gas has bought gas from TCGS on the Iroquois pipeline forseveral years; however, this agreement is the first time the twohave agreed to consolidate gas supply, pipeline capacity andstorage optimization into one agreement. Yankee Gas Services servesabout 183,000 customers in 68 Connecticut cities and towns. YankeeEnergy is also the parent of Yankee Energy Services Co., whichprovides energy-related services including building automation andHVAC equipment services.

TransCanada PipeLines Ltd. recently signed a three-yearagreement with Semco Energy Gas Co. for gas supply management.Semco also will buy the majority of its gas supplies fromTransCanada for the three years of the agreement, which iseffective April 1, 1999 (See NGI Oct. 9, 1998). LDC Semco has morethan 240,000 customers in the Upper and Lower Peninsulas ofMichigan. The agreement calls for TransCanada to manage 157.5MMcf/d of gas transportation on five U.S. pipelines on behalf ofSemco. TransCanada also will manage 16 Bcf of storage for theutility.

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