Dominion Resources, CNG Enter Agreement to
Develop Power Generation Along CNG Pipeline System
RICHMOND, Va. and PITTSBURGH -- Dominion Resources Inc. (NYSE:
D) and a subsidiary of Consolidated Natural Gas Company (NYSE: CNG) today announced
that they have signed an agreement to develop natural gas-fired power generation
facilities along CNG’s natural gas pipeline system.
Under terms of an exclusive interim alliance agreement signed
today, Dominion Resources and CNG Power Company will identify and evaluate potential
sites for development of facilities along CNG’s natural gas pipeline network
in Ohio, Pennsylvania, New York, West Virginia and Virginia. Dominion Resources
and CNG affiliates will develop, own, operate and maintain the facilities on
a 50-50 ownership basis.
At present, the companies have identified 45 potential development
sites, a number the alliance expects to broaden. Negotiations are under way
with major turbine manufacturers for pricing and delivery of 10 turbines over
a period of the next two to three years. Letters of intent and memoranda of
understanding with the selected manufacturers are expected to be signed this
month.
Power generated by the facilities will be marketed by The
Wholesale Power Group of Dominion Resources. The group nearly tripled its wholesale
megawatt-hour sales in 1998 compared to 1997, increasing volume from about 20
million megawatt-hours to more than 60 million megawatt-hours. The Wholesale
Power Group is increasingly active in natural gas wholesale trading and is now
marketing a portion of CNG production.
In a joint statement, Thos. E. Capps, Dominion Resources
chairman, president and chief executive officer, and George A. Davidson Jr.,
CNG chairman and chief executive officer, said:
"This alliance agreement continues the momentum created
by the announcement of the planned merger of our two companies. It is a first
step in combining Dominion Resources’ and CNG’s complementary asset bases and
skills sets in electric power and natural gas to enhance value across the energy
production chain. Successful execution of this alliance agreement will further
position us to efficiently serve the growing energy needs across a region that
accounts for 40 percent of the nation’s energy demand."
In February, Dominion Resources, based in Richmond, Va.,
and CNG, based in Pittsburgh, signed a $25 billion merger agreement to create
the nation’s fourth largest electric and natural gas company. The merger is
expected to be completed later this year or early next year.
