Duke Energy Field Services became the top NGL producer in thecountry and the second largest gas marketer with completion of itspurchase of UPFuels, and Union Pacific Resources’ marketingoperations for $1.35 billion.

Duke’s processing capacity now stands at 6.9 Bcf/d. Liquidsproduction is up to 200,000 b/d, and gas marketing is about 11Bcf/d based on 1998 sales volumes. Its purchase of NP Energy inDecember added another 1 Bcf/d of gas sales and could propel Duketo the No. 1 marketing spot, replacing Enron. Additionally, 8,000miles of gas pipeline are being added through the UPR deal givingDuke a total of 28,000 miles of gas lines.

“The completion of this purchase positions Duke Energy FieldServices as one of the top participants in the midstream gasindustry,” said Jim Mogg, CEO of Duke Energy Field Services. “Alsoeffective April 1, Duke Energy Field Services plans to complete thepurchase of Koch’s gathering, treating and processing assets inSouth Texas; will finalize [construction of] the new 200 MMcf/dcryogenic Wilcox plant in South Texas; and mark the beginning ofthe first full month of operations for the Mobile Bay ProcessingPlant, of which the company is the operating partner.”

Under the agreement, much of UPR’s U.S. production will begathered and processed by Duke for a minimum of 10 years. UPR alsowill dedicate for five years most of its natural gas and NGLproduction to Duke Energy for marketing.

For UPR, the deal marks an important step toward strengtheningits balance sheet and hitting debt reduction targets, said UPRChairman Jack Messman. “Our deal with Duke Energy was the largestelement in our announced program to reduce debt by $2 billion bythe end of this year.”

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