Dynegy Building NC Gas-Fired Generation for Duke

Dynegy Inc. -- formerly NGC Corp. -- plans to construct a gas-fired, four-unit, 600 MW generation facility in Rockingham County, NC, and Duke Power, the electric utility of Duke Energy, signed a letter of intent to buy the 600 MW of capacity and energy generated by the power plant.

Dynegy Power Corp. is finalizing scope, design and procurement details for the generation facility. Once completed, the facility will serve demand of Duke Power and other wholesale customers in the region. The contract with Duke begins June 1, 2000 and runs through 2003, with Duke having the option to extend it through 2008.

"The development of the Rockingham Power Facility and the services we're providing Duke are both examples of Dynegy's commitment to the continued expansion of our power generation and marketing portfolio," said Dynegy Chairman Chuck Watson. "The Rockingham facility strengthens our regional presence and positions us to better meet the growing demands of the southeastern markets and the specific needs of Duke and their customers."

Ted McMeekin, senior vice president of power generation for Duke Power, said because the plant will be in Rockingham County it will be able to deliver reliable power throughout the Duke Power region - especially during the critical demand periods of the summer.

Dynegy Sells Processing

Separately, Dynegy sold its Haynesville, LA, gas processing and fractionation facility and related gas and gas liquids pipeline systems to Duke Energy Field Services. The sale of the non-strategic asset continues the rationalization of certain gas processing plants acquired from Trident and Chevron, which has resulted in greater operating efficiencies and lower costs, Dynegy said.

"In 1996, Dynegy Midstream Services operated 41 plants and had joint venture interests in 16 additional plants," said Steve Furbacher president of Dynegy Midstream Services, previously known as Warren Petroleum. "With the sale of the Haynesville Plant, the company operates 35 facilities and has interests in 12 others. As we have reduced the number of operated facilities, we have increased plant utilization by 9%, the gas volume processed by 11% and significantly reduced operating expenses."

The Haynesville processing facilities consist of two processing plants, a lean oil and a cryogenic expanded plant, with the capacity to process 85 MMcf/d. The facilities are in Claiborne and Webster parishes. The price was not disclosed.

"The acquisition of these facilities is an excellent fit with our existing processing and gathering facilities in Louisiana and allows Duke Energy Field Services to expand its gathering, compression and processing services along the Louisiana/Arkansas state line. This area continues to experience significant growth in drilling activity," said Jim Mogg, president of Duke Energy Field Services.

On April 1, Duke Energy Field Services also began deliveries into the Perryville Hub in northern Louisiana through a new 4.5-mile pipeline and the addition of 7,500 hp of mainline compression. The expansion enables Duke to provide an incremental 100 MMcf/d of capacity into the major transmission pipelines serving the Midwest and Northeast markets.

Joe Fisher, Houston

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