Dominion Energy Joins Texaco's Sabine Hub Services, Chandler Energy Resources in Development of 'Alberta Hub'

RICHMOND, Va., Aug. 6 /PRNewswire/ -- Dominion Energy, Inc. announced today that it is joining Sabine Hub Services, Inc., a division of Texaco Canada Petroleum, Inc., and Chandler Energy Resources, Inc. in the development of a full-service natural gas hub and storage facility in Alberta, Canada. It will be operational this winter.

The facility, which will be named the "Alberta Hub," will utilize a depleted natural gas reservoir with 25 billion cubic feet (BCF) of storage capacity as a centralized point for all gas transactions in the area. The hub is expected to improve and enhance the capability of gas producers, large gas end users and marketers to buy, sell and transport natural gas in Alberta. It will feature a peak injection/withdrawal rate of 500 million cubic feet per day (MMCF/D).

The facility will offer a wide range of marketing and transportation services designed to minimize transaction costs, increase reliability and give buyers and sellers more options for trading natural gas. Services to be provided include firm storage, interruptible storage, parking, loaning, balancing, transfers among hubs, wheeling, exchanges and nominations.

Because of its location on NOVA Corp.'s mainline, the storage facility will have access to substantial supplies of natural gas from the Western Canadian Sedimentary Basin enroute to markets in Canada and the U.S.

Dominion Energy will own 40 percent of the Alberta Hub. Sabine and Chandler Energy Resources will share the remaining equity in the facility. Other terms are confidential.

Sabine, which will manage the Alberta Hub, brings to the venture expertise gained from operations of the Henry Hub, the major gas market center and supply aggregation point for south Louisiana, and the CNG/Sabine Center, a market center covering a five-state area in the Northeast U.S. Since 1990, the Henry Hub has served as the standard delivery mechanism for natural gas trade on the futures market of the New York Mercantile Exchange (NYMEX).

Dominion Energy is the natural gas and oil and competitive power subsidiary of Dominion Resources, Inc., (NYSE: D), a holding company with $14 billion in assets headquartered in Richmond, Va. Dominion Energy is active in exploration, acquisition and development of natural gas assets. It now has a reserve base of 400 billion cubic feet equivalent (BCFE) and has producing operations throughout the U.S and Gulf of Mexico.

Dominion Energy is growing its downstream asset base with investments in natural gas storage, processing, marketing and transportation. The company owns a 45 MMCF/D gathering, carbon dioxide processing and transportation facility in Michigan. In addition, Dominion Energy's wholly owned Carthage Energy Services, Inc., provides natural gas management services to producers and fuel supply and transportation management services to end users in Michigan and the Midwest.

Dominion Energy is also among the largest independent power companies in the world. It develops, acquires and operates independent power facilities throughout the U.S. and Latin America. It has ownership and operating interests in 19 stations in the U.S., Belize, Bolivia and Argentina totaling more than 2,150 megawatts. It is in the process of concluding the acquisition of eight stations in Peru totaling 405 megawatts and a station in Illinois exceeding 1,100 megawatts.

Dominion Resources is also active in regulated electric power through its principal subsidiary, Virginia Power, which serves nearly 2 million homes and businesses in Virginia and northeast North Carolina.

In addition to developing natural gas storage operations, Chandler Energy Resources, an arm of the Chandler organization, is pursuing development opportunities in competitive power supply in North America. The Chandler organization also holds Chandler Energy, Inc., its marketing arm which moves more than 1,000,000 MCF/D.

Jagjit Yadav, president of Sabine Hub Services, said: "We are extremely pleased to have joined the resources of Dominion Energy with Sabine and Chandler to develop a hub and storage facility that will prove to be a popular natural gas supply and trading location in Canada. The Alberta Hub can become a focal point for the trading of natural gas in Canada, as the Henry Hub is for the U.S. market.

"The Alberta Hub represents another important step in developing a North American network of hubs that will allow the natural gas industry to conduct business throughout North America. The industry can expect the same level of customer focus, reliability, responsiveness and standardized business processes to which they have become accustomed at the Henry Hub," Yadav said.

G.E. Lake, Jr., senior vice president-oil and natural gas operations of Dominion Energy, said the decision to join Sabine and Chandler in development of the Alberta Hub conforms with the company's strategy to grow not only as a producer but as provider of downstream services, such as storage and marketing.

Lake added: "We are particularly fortunate that we are able to enter such a promising venture with partners possessing broad experience and demonstrated success in our industry. Our expansion into the venture moves us a step forward in our strategy to grow our gas and oil business with successful partners in selected ventures where our prospects of increased shareholder value are good."

Bruce Chandler, president of Chandler Energy Resources, said the partnership combines three companies with complementary strengths.

"Having an international company of Dominion Energy's caliber participating in the Alberta Hub is good news for Chandler Energy, Sabine and the community at large," he said. "Dominion's expertise in both the natural gas industry as a producer and as a major provider of electrical power in the United States and South America brings a new dimension to the skill levels of the other partners in our storage project. Their understanding of the producing community's needs will be a decided asset to the Alberta Hub and our future customers."

SOURCE Dominion Energy, Inc.

    -0-                             08/06/96

/CONTACT: Bruce Chandler of Chandler Energy Resources, 403-571-6725; or Mark Lazenby of Dominion Energy, 804-775-5704/

(D)

CO: Dominion Energy, Inc.; Sabine Hub Services, Inc.; Chandler Energy

Resources, Inc. ST: Virginia IN: UTI SU:

KS-SL -- DCTU006 -- 3309 08/06/96 11:06 EDT http://www.prnewswire.com