Portland Natural Gas Transmission System opens headquarters in Portland, Maine.

PORTLAND, Maine--(BUSINESS WIRE)--Aug. 28, 1995--A partnership consisting of some of the largest natural gas companies in North America today joined state and city officials in raising the curtain on a new international gas pipeline project that promises to be an important development in Maine's and northern New England's economic future.

Commenting on today's opening of the headquarters of the Portland Natural Gas Transmission System in Portland, Maine Governor Angus King said, "I am delighted that Portland has been selected as the headquarters for this important new energy project, and encouraged by the prospect that additional natural gas supplies will soon be coming to Maine."

"Making a clean resource like natural gas more available in Maine is an excellent way to strengthen and diversify our portfolio of energy supplies, which is critical to Maine's ability to be competitive in the international marketplace," Governor King said.

The Portland Natural Gas Transmission System (PNGTS) is a proposed new natural gas pipeline that will run for about 250 miles from the Canadian border in northeastern Vermont to Portland, Maine, and then to Haverhill, Massachusetts. Beginning in November, 1998 PNGTS will permanently replace and expand the gas service that Granite State Gas Transmission, Inc. currently provides in the same corridor on a temporarily leased pipeline as well as its own smaller diameter facilities. This permanent pipeline will create an opportunity to open new areas of Vermont, New Hampshire and Maine to natural gas service as well as provide for market growth where gas service is currently available.

PNGTS will provide increased access to natural gas supplies from a variety of U.S. and Canadian natural gas production and storage areas through interconnections with TransCanada Pipe Lines Ltd. in Canada and the Tennessee Gas Pipeline System in the U.S. The new pipeline will have a positive economic impact along the proposed route through direct and indirect construction expenditures and new property tax revenues.

The project is expected to cost US$ 220 million, and will primarily follow existing pipeline and electric transmission corridors, resulting in minimal environmental impact. PNGTS will be a 20-inch diameter high capacity pipeline designed initially to transport up to 200 million cubic feet of natural gas per day. Its capacity can be expanded economically to more than 300 million cubic feet per day to meet future growth needs.

PNGTS marked two development milestones in August. First, natural gas distributors Northern Utilities, Inc., and Bay State Gas Company agreed to ship a quantity of gas that will generate about half PNGTS's projected revenue requirements. Second, field activity was expanded to full operational levels. In addition to the 15 new full-time employees currently staffing the Portland headquarters, survey crews totaling 49 employees are currently involved in engineering and environmental studies along the 250-mile pipeline route.

The design, construction and operation of PNGTS will be subject to strict regulatory review and oversight. Applications with federal and state regulatory agencies will be filed in early 1996. Construction is slated to begin in early 1998, in order to supply customers with an economic, competitive and clean North American energy resource by November 1998.

Participating in ceremonies opening the PNGTS headquarters today were Maine Commissioner of Economic Development Thomas D. McBrierty, Portland Director of Economic Development Virginia Hildreth, Andre Caille, President and CEO of Gaz Metropolitain, Inc.; Thomas J. Norris, Senior Vice President, Operating Partnerships, of Tenneco Gas, and Roger A. Young, President and CEO of Bay State Gas Company. (See note below for a more complete description of project consortium.)

"It is gratifying to see some of our country's major gas suppliers working together and in concert with a Canadian counterpart, Gaz Metropolitain," McBrierty said. "We are always pleased to find new ways to reinforce our relationship with the Province of Quebec."

"PNGTS is an exciting project and a long-awaited development -- the creation of an efficient and permanent natural gas link between Eastern Canadian and New England markets," Caille said.

"PNGTS is well on its way toward a November 1998 in-service date," said Young, "being more than 50 percent subscribed and well along the path toward identifying a route that passes muster environmentally and economically."

Information about PNGTS partners:

Bay State Gas Company (NYSE: BGC), (sponsoring PNGTS through its subsidiary, Granite State Gas Transmission, Inc.) is the largest independent natural gas distribution company in New England. It serves about 288,000 customers in Massachusetts and, through its Northern Utilities, Inc. subsidiary, in New Hampshire and Maine.

Gaz Metropolitain and Company, Limited Partnership (MSE-TSE: GZM.UN) is the local gas distribution company in Quebec. It serves approximately 150,000 customers in the province, delivering about 200 billion cubic feet of natural gas in 1994.

J. Makowski Company, Inc. (JMC) is the northeast energy project development and operating arm of US Generating Company, a partnership between affiliates of PG&E Enterprises, the non-utility subsidiary of Pacific Gas and Electric Company, and Bechtel Enterprises Inc., the development, financing, and ownership unit of Bechtel Group, Inc. Together JMC and US Generating Company manage about 280 billion cubic feet per year of natural gas supplies and transportation, and over 3,600 megawatts of electric generation capacity in the U.S. and Canada. JMC's natural gas activities are focused on the development, ownership and management of natural gas pipelines, underground natural gas storage facilities and energy services to large volume wholesale customers.

Tenneco Gas, a unit of Tenneco, Inc. (NYSE: TGT), transports one-sixth of the nation's growing demand for natural gas along its 26-state, 19,300-mile pipeline network. Tennessee Gas Pipeline, Tenneco's largest interstate system, stretches from the Gulf Coast to New England, where it supplies approximately half the Northeast's natural gas needs.

CONTACTS: David Reichman, 508-836-7375 (General inquiries, US)

or

Marc Rochette, 514-598-3866 (Canada)

or

Sheri Larsen, 802-863-4311 (Vermont)

or

John Flumerfelt, 207-797-8002 (northern New Hampshire,

northern Maine)

or

Stan Usovicz, 617/270-0609 (southern New Hampshire,

southern Maine)