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EMPIRE STATE PIPELINE, SITHE ENERGIES SIGN AGREEMENT

 EMPIRE STATE PIPELINE, SITHE ENERGIES SIGN AGREEMENT
 HOUSTON, March 4 /PRNewswire/ -- Sponsors of the proposed Empire


State Pipeline today announced that they have signed an agreement with Sithe Energies, Inc., to provide natural gas transportation services to a major new cogeneration facility near Oswego, N.Y.
 Under the 20-year precedent agreement, Empire will provide up to 185 million cubic feet per day of firm natural gas transportation to Sithe Energies' $850 million Independence Station.
 Empire will transport a mix of Canadian and U.S. natural gas supplies, which will be used by the plant to produce both electric power and steam.
 "We're extremely pleased that Sithe Energies has chosen Empire to meet the energy transportation needs of this significant Independence Project," said James R. Paul, president and chief executive officer of the Coastal Corporation (NYSE: CGP).
 "This agreement underscores the importance of the Empire pipeline and the crucial role it will perform in meeting New York's energy requirements," Paul added.
 Paul also noted that ANR Pipeline Company, the Coastal subsidiary that will construct and operate Empire, already provides natural gas transportation service to Sithe Energies' Sterling Power facility, via its Lebanon Extension.
 William Kriegel, chief executive officer of the Sithe/Energies Group, said: "We are enormously pleased to reach another important milestone on the road to commencement of construction on our Independence project. We expect to finance this project by the end of the third quarter of 1992 and begin construction in early 1993." Initial startup and testing are scheduled to begin in August of 1994, with full commercial operation beginning in January 1995.
 Sithe Energies' Independence plant, which will be the nation's largest non-utility affiliated combined-cycle cogeneration facility, will produce approximately 1,004 megawatts of electric power while extracting 235,000 pounds per hour of process steam.
 The plant's electric power output will be sold to Consolidated Edison Company of New York, Inc. and others. The process steam will be supplied to an existing Alcan Rolled Products Company facility.
 An intrastate pipeline that will run between the international border near Buffalo and Syracuse, N.Y., Empire has received approvals from the New York State Public Service Commission and the Federal Energy Regulatory Commission. Construction should begin this year, upon receipt of pending Canadian regulatory authorization.
 Empire sponsors are subsidiaries of the Coastal Corporation, Union Energy, Inc., and Rochester Gas and Electric Corporation.
 Rochester Gas and Electric supplies electric and natural gas service wholly within the state of New York and is engaged in the production, transmission, distribution and sale of these services in a nine-county area centering around the city of Rochester.
 Union Energy is a Toronto-based integrated natural gas firm with $2 billion in assets and operations in natural gas production, marketing, transportation, storage and distribution.
 The Coastal Corporation is a Houston-based energy holding company. It has consolidated assets of $9 billion and subsidiary operations in natural gas transmission and storage, refining and marketing, oil and gas exploration and production, coal, chemicals, trucking and independent power production.
 The Sithe/Energies Group is headquartered in New York City. It currently operates 18 independent power projects totaling over 400 megawatts in 10 states and is completing construction of two additional gas-fired cogeneration projects. When the Independence Station and other projects commencing construction in 1992 are completed, Sithe Energies will operate 2,000 megawatts of power generating facilities, and its committed investment will be close to $2.5 billion.
 -0- 3/4/92
 /CONTACT: Dave Scott, 713-877-6733, or Marian Droll, 313-496-3756, both of Coastal, or Bruce Wrobel of Sithe Energies, 212-755-7600/
 (CGP) CO: Coastal Corporation; Sithe Energies, Inc. ST: Texas, New York IN: OIL SU:


SH-OS -- NY074 -- 5076 03/04/92 15:52 EST
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Date:Mar 4, 1992
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