CMS, DEFS Swap Strategic Properties
In a strategic move said to benefit both midstream energy
companies, CMS Field Services Inc. has swapped some of its natural
gas assets in Oklahoma and Kansas for some of Duke Energy Field
Services' similar assets onshore and offshore Louisiana.
DEFS' natural gas gathering and condensate measuring and
transportation assets onshore and offshore Louisiana were exchanged
with CMS Field Services' assets in Oklahoma and Kansas, giving each
company more proximity to their other assets. The deal closed Dec.
20 and was announced Friday. No financial details were disclosed.
"This transaction makes both strategic and economic sense for
CMS Energy," said Tim Young, senior vice president of the field
services division. In 1999, CMS Energy acquired Duke Energy's
Panhandle Eastern Pipe Line Co. and Trunkline Gas Co., and Young
said the swap gives CMS more opportunities to offer enhanced
services to "existing and potential shippers" on CMS-owned
properties along the Gulf Coast.
In the deal, CMS obtained 10 offshore gas gathering laterals, a
one-third ownership in the Atchafalaya Pipeline System and complete
ownership in a Patterson, LA condensate measuring facility. The 10
offshore gas gathering laterals are connected to two offshore
pipelines owned by CMS Energy: the Trunkline Gas Co.'s Terrebonne
system and the Sea Robin Pipeline Co. The 39-mile-long Atchafalaya
Pipeline receives condensate from the Terrebonne system, while the
Patterson measurement facility measures condensate transported
through the Atchafalaya pipe.
In return, Denver-based DEFS, a subsidiary of Duke Energy and
Phillips Petroleum, obtained two Midcontinent natural gas gathering
systems: the Bradshaw system in Kansas and the Roaring Creek system
in Oklahoma. DEFS also will pick up the Miles Hampton and Ulysses
systems in Kansas and the Christmas Lateral in South Texas.
"These assets are a great strategic fit with our assets in the
area, as they will specifically supply to plants with existing
capacity," said Michael Bradley, senior vice president, DEFS'
northern division. Bradley said the asset exchange supported the
company's growth strategy "optimizing and rationalizing assets" and
giving the company more flexibility.
CMS Field Services supplies regions of Louisiana, the Texas Gulf
Coast, West Texas, Central Texas, the Midcontinent and the Rocky
Mountains, and owns approximately 5,000 miles of gathering
pipeline. DEFS, 70% owned by Duke and 30% by Phillips, operates in
11 states and across five of the largest natural gas producing
regions in North America. It owns and operates 71 plants and 57,000
miles of pipe, with operating territory extending from western
Canada to the Gulf Coast.
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