For Immediate Release
For Immediate ReleaseDecember 1, 1999
HERNDON, Va., December 1, 1999 -- Columbia LNG Corporation and Pepco Energy Company announced today that Columbia will acquire Pepco`s interest in the Cove Point LNG Limited Partnership. The agreement will give Columbia 100 percent ownership of the Cove Point liquefied natural gas (LNG) terminal, which beginning in 1994 had been owned equally by Columbia and Pepco.
"This is another example of Columbia`s strategic focus on providing flexible and valuable transport options to the rapidly growing Northeast and mid-Atlantic natural gas markets," said Oliver G. Richard III, chairman, president and CEO of Columbia Energy Group. "The plan that Columbia LNG has developed for the Cove Point terminal is in line with Columbia`s overall vision for increasing our growth."
"The sale of our 50 percent ownership interest in Cove Point allows Pepco to focus its capital resources on its high-growth telecommunications strategy," said John D. McCallum, President and CEO of Pepco Energy Company.
Columbia LNG Corporation is a subsidiary of Columbia Energy Group (NYSE: CG). Pepco Energy is a wholly owned but separate affiliate of Potomac Electric Power Company (NYSE: POM). The acquisition is subject to clearance under the Hart-Scott-Rodino Act and is expected to occur in January 2000. Financial terms of the transaction were not disclosed.
"The agreement we have reached will facilitate Columbia`s plans to reactivate the LNG receiving facilities and expand the business to include LNG tanker unloading services at the Cove Point terminal," L. Michael Bridges, president and CEO of Columbia LNG Corporation said. "We have received indications of interest in such services from several companies."
Bridges added that an open season would be held after the acquisition is completed where potential customers would bid on capacity. Based on the results of the open season, Cove Point is expected to file a certificate of application with the Federal Energy Regulatory Commission to reactivate the terminal`s marine facilities.
Located in Lusby, Md., the Cove Point LNG terminal includes liquefied natural gas storage and terminal operations and an 87-mile natural gas pipeline. The pipeline extends from the Cove Point terminal to interconnections with gas pipelines in Northern Virginia. It is able to send out up to 1 billion cubic feet of gas per day. The Cove Point LNG terminal currently provides peak shaving services to customers in the mid-Atlantic and Southeastern regions.
Pepco Energy Company is a subsidiary of Potomac Electric Power of Washington, D.C. Pepco provides electricity services to nearly 700,000 customers in the District of Columbia and the Maryland suburbs, and telecommunications services to the greater Washington metropolitan area through a joint venture in Starpower Communications. Additional information about Potomac Electric Power Company may be found on the Company`s Web site at www.pepco.com.
Columbia Energy Group, based in Herndon, Va., is one of the nation`s leading energy services companies, with assets of approximately $7 billion. Its operating companies engage in all phases of the natural gas business, including exploration and production, transmission, storage and distribution, as well as retail energy marketing, propane and petroleum products sales, and electric power generation. Information about Columbia Energy Group is available on the Internet at www.columbiaenergygroup.com.
Point of Contact:Bob Dobkin