Eastern Enterprises sells interest in Maritimes and Northeast pipeline project.

WESTON, Mass.--(BUSINESS WIRE)--July 10, 1996--Eastern Enterprises (NYSE: EFU) announced today that it had sold it 10 percent equity position in the Maritimes and Northeast (M&NE) pipeline project to PanEnergy Corp. and Westcoast Energy Inc., two of the existing partners in the project.

The M&NE pipeline project is a proposed 650 mile high pressure gas delivery system that will transport natural gas from reserves near Sable Island, Nova Scotia to the Boston area. The proposed project is scheduled to be in operation on Nov. 1, 1999.

"When Eastern first became involved in the Maritimes and Northeast pipeline project," commented J. Atwood Ives, Eastern chairman and chief executive officer, "our principal energy subsidiary, Boston Gas Company, was actively involved as a gas merchant with predictable, long-term requirements for natural gas. However, in response to the rapidly-deregulating natural gas marketplace, Boston Gas recently submitted a comprehensive restructuring proposal to the Massachusetts Department of Public Utilities that would allow all customers to choose alternative suppliers. Consequently, Boston Gas plans to cease the purchasing and reselling of gas by the year 2000, becoming a distribution-only company at that time. As a result of this strategy, Eastern reevaluated its participation in the pipeline project and decided to sell its interest."

Ives added, "Eastern continues to endorse the development of the M&NE pipeline project. We believe that ongoing deregulation of gas markets will create added demand for more sources of supply and M&NE is well positioned to profit from this trend. In fact, we anticipate that Eastern's newly-created, unregulated marketing subsidiary, AllEnergy Marketing Company Inc., will be a purchaser of M&NE capacity and gas supplies. In addition, Boston Gas expects to facilitate deliveries of gas during the first phase of the project, which will serve customers in southern New Hampshire and Maine."

Eastern's interest in the M&NE pipeline project was sold for $1.1 million, the amount invested. The transaction will be accounted for in the third quarter of 1996.

Eastern Enterprises owns and operates three businesses. Boston Gas Company is New England's largest distributor of natural gas, serving over 500,000 residential, commercial and industrial customers in Boston and 73 other eastern and central Massachusetts communities. Midland Enterprises Inc. is a leading carrier of coal and other dry bulk cargoes on the nation's inland waterways, with a fleet of 2,400 barges and 84 towboats. Headquartered in Cincinnati, Ohio, Midland provides low-cost marine transportation to much of the country's major industrial and agricultural regions. AllEnergy Marketing Company Inc., headquartered in Waltham, Mass., is a new unregulated retail energy marketing company, providing natural gas and related services to commercial and industrial customers in New England. As utility markets are deregulated, AllEnergy's goal is to be the leading provider of energy commodities and related services to households and businesses throughout the Northeast.

CONTACT: Eastern Enterprises

Jane W. McCahon, 617/647-2316