Southern Company Energy Marketing enters Canada in deal to manage Pan-Alberta natural gas assets
ATLANTA Southern Company Energy Marketing, the energy trading and marketing arm of the nations largest producer of electricity, has agreed in principle to manage the assets of Pan-Alberta Gas Ltd., the second-largest Canadian exporter of natural gas.
Pan-Alberta currently markets about 1.2 billion cubic feet of gas per day, while Southern Company Energy Marketing recently has been trading about 7 billion cubic feet per day.
As part of the transaction, Southern Company Energy Marketing would assume Pan-Albertas office in Calgary and integrate Pan-Albertas businesses with its Atlanta trading and marketing operations.
Pan-Alberta fits well with our strategy to expand in North America by linking energy assets to our growing trading and marketing operations, said Gary Morsches, president of Southern Company Energy Marketing. With the opening of a Southern Company Energy Marketing office in Calgary, we intend to expand on Pan-Albertas successes and use its existing infrastructure and expertise to help grow our energy business in Canada and the northern United States. Southern Company Energy Marketing is a joint venture between Southern Energy Inc. and Vastar Resources Inc. of Houston.
This innovative arrangement provides new opportunities for our producer-owners, market customers and employees and crystallizes the value of Pan-Albertas assets for our producer-owners, said Rod Pocza, president and chief executive officer of Pan-Alberta.
If final agreement is reached, it will be subject to regulatory approvals in Canada and the United States. Thereafter, if approved by both companies boards of directors, the deal would go into effect in the second quarter of 2000.
Pan-Alberta is owned by more than 400 Western Canada natural gas producers and has nearly US$1.5 billion in sales annually. Pan-Albertas assets include long-term dedicated gas supply arrangements, more than 1.2 billion cubic feet per day of pipeline transportation capacity and in excess of 11 billion cubic feet of storage capacity. Pan-Alberta has 56 employees in Calgary.
Southern Energy Inc. with operations in 12 countries on five continents
develops, builds, owns and operates power production and delivery facilities and provides a broad range of services to utilities and industrial companies around the world. Its Southern Company Energy Marketing unit provides energy trading, marketing and financial services and other energy-related commodities, products and services to customers in North America.
Southern Energys subsidiaries and affiliates include Freeport Power Co. in the Bahamas; Western Power Distribution in England; Bewag, the electric utility serving Berlin, Germany; EDELNOR, the power producer serving northern Chile; CEMIG, an electric utility in Brazil; the Power Generation Company of Trinidad and Tobago; the Alicura power station in Argentina; the Southern Energy Europe energy trading operation, based in the Netherlands; Consolidated Electric Power Asia, with operations in the Philippines, China and Australia; and U.S. power stations in Massachusetts, New York, Texas, California, Virginia and Indiana.
Southern Company (NYSE: SO), the largest producer of electricity in the United States, is also the parent firm of Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric.
Vastar Resources Inc. (NYSE: VRI), headquartered in Houston, Texas, finds, develops and produces natural gas and liquid hydrocarbons. The company is currently active in more than 100 producing fields, with production in the Gulf of Mexico shelf, Gulf Coast, Rocky Mountains and Mid-Continent areas, and a growing exploratory and development presence in the Gulf of Mexico deepwater trend. Additional information on the company is available on the companys web site at www.vastar.com.