Duke Climbs to Top NGL Spot with UPFuels Deal
Duke Energy Field Services became the top NGL producer in the
country and the second largest gas marketer with completion of its
purchase of UPFuels, and Union Pacific Resources' marketing
operations for $1.35 billion.
Duke's processing capacity now stands at 6.9 Bcf/d. Liquids
production is up to 200,000 b/d, and gas marketing is about 11
Bcf/d based on 1998 sales volumes. Its purchase of NP Energy in
December added another 1 Bcf/d of gas sales and could propel Duke
to the No. 1 marketing spot, replacing Enron. Additionally, 8,000
miles of gas pipeline are being added through the UPR deal giving
Duke a total of 28,000 miles of gas lines.
"The completion of this purchase positions Duke Energy Field
Services as one of the top participants in the midstream gas
industry," said Jim Mogg, CEO of Duke Energy Field Services. "Also
effective April 1, Duke Energy Field Services plans to complete the
purchase of Koch's gathering, treating and processing assets in
South Texas; will finalize [construction of] the new 200 MMcf/d
cryogenic Wilcox plant in South Texas; and mark the beginning of
the first full month of operations for the Mobile Bay Processing
Plant, of which the company is the operating partner."
Under the agreement, much of UPR's U.S. production will be
gathered and processed by Duke for a minimum of 10 years. UPR also
will dedicate for five years most of its natural gas and NGL
production to Duke Energy for marketing.
For UPR, the deal marks an important step toward strengthening
its balance sheet and hitting debt reduction targets, said UPR
Chairman Jack Messman. "Our deal with Duke Energy was the largest
element in our announced program to reduce debt by $2 billion by
the end of this year."
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