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Oneok Capitalizing on Gas With Power Entry

Oneok Capitalizing on Gas With Power Entry

Oneok Inc. plans to enter the electric generation and power marketing businesses with an Oklahoma generating facility. The company signed a contract with General Electric to buy four gas turbine generators with a capacity of 300 MW. A generation facility encompassing the four units will be constructed and in service by June 1, 2001.

David Kyle, president of Oneok, said, "Our focus will be to serve the electric peaking needs with natural gas-fired generation during those times when consumption is at maximum levels. Owning natural gas-fired power generation is a natural extension of our core business and provides the opportunity to expand our growing power marketing business."

Bill DeWare, vice president of Oneok Power Marketing, said, "Electric deregulation is opening the door of opportunity. Power shortages in the eastern part of the United States just last week certainly indicate the growing need for more electric generation. We know there is a need right now for more peaking capacity in the region served by the Southwest Power Pool and we want to move quickly to establish ourselves and help meet that need. We have already executed a 15-year letter of intent with the Oklahoma Municipal Power Authority to purchase approximately 25% of our total generating capacity starting in mid-2001."

The estimated cost of the four gas turbine generators is $70 million. The new generating facility will be built near Oneok's West Edmond gas storage facility in Logan County, OK. The location will give the plant access to Oneok's gas storage and firm electric transmission service.

"This is a wrap-around strategy. We plan to wrap around our existing natural gas assets and personnel and operate at the same address, using our natural gas molecule to produce electricity," DeWare said.

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