Duke Energy, Williams to buy Gulfstream pipeline, suspend Buccaneer plans
Duke Energy Corp. and Williams have agreed to purchase Coastal Corp.'s 100% interest in the Gulfstream gas pipeline, which would deliver Gulf of Mexico gas to Florida. Duke Energy and Williams will develop the Gulfstream line rather than their competing Buccaneer pipeline.
Duke Energy Corp. and Williams have agreed to purchase Coastal Corp.'s 100% interest in the Gulfstream gas pipeline. They will develop the Gulfstream line rather than their competing Buccaneer pipeline.
Gulfstream would move gas from offshore Alabama 744 miles across the Gulf of Mexico from Alabama to the eastern coast of Florida. Buccaneer would extend 420 miles across the Gulf of Mexico from Alabama to western Florida.
"We have recognized for some time that the market will support only one new pipeline into the state of Florida," said Cuba Wadlington Jr., president and CEO of Williams' gas pipeline group. "The market will now be able to clearly see a single, viable competing pipeline into the state."
Gas demand in Florida is expected to soar, prompted in part by need for more electricity in the state. Duke Energy said electricity generation growth is expected to hit 10,000 Mw by 2007.
The $1.6 billion Gulfstream pipeline, which will have 1.1 bcf/day of capacity, should come online in June 2002. The companies said it has already "achieved two milestones in the Federal Energy Regulatory Commission approval process: preliminary determination on non-environmental issues and a favorable draft environmental impact statement."
The purchase of Gulfstream Natural Gas System LLC is subject to federal regulatory approvals and completion of the Coastal-El Paso Energy Corp. merger.
Financial details of the purchase were not disclosed.
"The agreement to sell Gulfstream is a significant step forward in completing the requirements of the Federal Trade Commission for the close of the Coastal/El Paso Energy Corporation merger," said David A. Arledge, chairman and chief executive officer of Coastal Corp.