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COLUMBIA LNG EXPECTS TO INITIATE PEAKING SERVICE AT ITS LIQUEFIED NATURAL GAS TERMINAL ON CHESAPEAKE BAY

 COLUMBIA LNG EXPECTS TO INITIATE PEAKING SERVICE
 AT ITS LIQUEFIED NATURAL GAS TERMINAL ON CHESAPEAKE BAY
 WILMINGTON, Del., Nov. 12 /PRNewswire/ -- Columbia LNG Corporation said today it expects to initiate, beginning in 1994, a peaking service at its liquefied natural gas terminal located on Chesapeake Bay near Cove Point, Md., that would make regasified LNG available to assist gas distribution companies in serving customers' needs on extremely cold winter days.
 Columbia LNG President L.M. Bridges said initial contacts with prospective distribution company customers indicate there is substantial interest in the proposed service, the cost of which will be competitive with available alternatives.
 Columbia LNG said it expects to file an application with the Federal Energy Regulatory Commission before the end of this year seeking authorization to provide the peaking service.
 Potential customers will have an opportunity to contract for the service during an "open season" shortly after the application is filed with the FERC. This will provide them access to a portion of up to 500 million cubic feet per day of regasified LNG to help them meet the abnormally large gas needs of their customers on the colder days that occur each winter. A total of 5 billion cubic feet of regasified LNG, enough to heat more than 50,000 homes for an entire year, would be available each winter.
 Bridges pointed out that, in addition to the peaking service, the terminal's storage and regasification capacity enables it to also offer a baseload terminalling service for companies interested in importing liquefied natural gas. He said he has been contacted about the possibility of base load LNG imports through the Cove Point terminal beginning in 1994.
 Cost of reactivating the terminal, which has been maintained in a standby state since the last shipload of liquefied natural gas was delivered in 1980, to provide both the peaking service and a terminalling service for base load imports is expected to be about $50 million.
 If only a peaking service is offered, the cost will be approximately $40 million. This includes the purchase and installation of equipment capable of liquefying up to 20 million cubic feet of domestic natural gas daily, which would then be stored in existing tanks at the terminal until needed the following winter.
 Bridges said Columbia LNG is engaged in discussions with other companies that could result in the formation of a partnership to provide the proposed services.
 He explained that while the terminal will remain under FERC jurisdiction, Columbia LNG will propose individually negotiated rates for the peaking and regasification services that will provide the flexibility to respond to competition. The proposed move from cost- based to market-based rates will require a $43.7 million after-tax writedown in the third quarter of previously uncollected depreciation charges that have been carried as a regulatory asset by Columbia LNG.
 Columbia LNG's terminal has a daily sendout capacity of 1 billion cubic feet of regasified LNG which makes it the largest LNG terminal in the United States.
 The Columbia Gas System, Inc. (NYSE:CG) owns 90.8 percent of Columbia LNG and Shell LNG Co. owns the remainder. Other subsidiaries of The Columbia Gas System, Inc., are engaged in the exploration, production, purchase, storage, transmission and distribution of natural gas and other energy operations such as cogeneration. The parent company and its largest pipeline subsidiary, Columbia Gas Transmission Corp., have been operating under Chapter 11 of the U.S. Bankruptcy Code since July 31, 1991.
 /delval/
 -0- 11/12/92
 /CONTACT: W. R. McLaughlin, 302-429-5443, or H.W. Chaddock, 302-429-5261 (both media); or D.W. McFarland, 302-429-5363, or T.L. Hughes, 302-429-5471 (both analysts), all of Columbia Gas System/
 (CG) CO: Columbia LNG Corporation; The Columbia Gas System, Inc. ST: Delaware, Maryland IN: OIL SU: PDT


MJ -- PH011 -- 0142 11/12/92 11:28 EST
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Date:Nov 12, 1992
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