Duke Energy Field Services (DEFS) finished off 2000 with a bangby completing three year-end asset transactions. First, the companyfinalized the $91 million sale of natural gas liquid (NGL) pipelineassets to TEPPCO Crude Pipeline, L.P., then it completed thepurchase of certain natural gas pipeline assets from El Paso FieldServices in two separate deals for an undisclosed sum.

The assets sold to TEPPCO include the Panola Pipeline and theSan Jacinto Pipeline, both of which are NGL pipelines. Under theagreement, TEPPCO also agreed to take over the lease of a 34-milecondensate pipeline. The three pipelines included in the sale alloriginate at DEFS’ East Texas Plant Complex located in PanolaCounty, TX.

“This sale underscores our strategy of growing earnings throughour TEPPCO master limited partnership,” said Jim Mogg, CEO of DEFS.”In 2000, we almost doubled the distribution that DEFS received asthe general partner of TEPPCO Partners, L.P., and at the same timeincreased the distribution to limited partnership unitholders.”

In the second transaction, which the company completed on Dec.28, 2000, DEFS acquired 100% of Gas Transmission Teco, Inc.’scommon stock. The company owns interests in the 500-mile Tecointrastate natural gas pipeline in Texas, and was purchased from ElPaso Field Services.

Included in the assets, DEFS gained a 50% interest in the ElPaso-operated West Texas Line which travels from Waha to NewBraunfels, a 100% interest in the Guadalupe Line that travels fromNew Braunfels to Dewville, and a 50% interest in the MidTex Linefrom Dewville to Katy. DEFS also received several supply lines andrelated assets with the acquisition.

DEFS said the lines combined have a 250 MMcf/d of natural gascapacity, and extend from Waha in West Texas to Katy. The companyalso noted that the lines interconnect five DEFS plants with acombined processing capacity of 640 MMcf/d.

“The timely addition of this strategic system provides DEFS withincreased marketing opportunities for the gas from these plants,”said Mogg. “The lines also allow DEFS new access to the growing SanAntonio/Austin corridor.”

In DEFS’ third end of the year transaction, the company acquiredEl Paso Field Services’ 50% interest in the 265-mile San Jacintonatural gas pipeline. The transaction brings DEFS’ ownership up to100%. The San Jacinto line provides gas gathering andtransportation services along the Texas Gulf Coast, with deliveryto a third party and two DEFS gas processing plants.

DEFS was formed last year when Duke Energy and PhillipsPetroleum combined their natural gas gathering and processingbusinesses. Duke Energy holds a 70% stake in the company whilePhillips retains a 30% share.

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