Conoco Enhances Natural Gas Portfolio
Conoco Inc. enhanced its natural gas portfolio last week,
announcing an agreement to acquire LG&E Energy Corp.'s natural
gas gathering and processing business assets in New Mexico, Texas,
Oklahoma and Montana. The deal will make Conoco the second largest
natural gas gatherer in the region, more than doubling its capacity
in southeast New Mexico and improving its processing capacity in
the region by 42%.
In the deal, the Houston-based company will acquire three
natural gas processing plants in New Mexico and Texas with a
combined processing capacity of 86 MMcf/d. Also included in the
acquisition are a natural gas storage facility and 1,200 miles of
natural gas pipelines. Financial terms were not disclosed.
"The properties are a significant enhancement to Conoco's
natural gas portfolio and allow us to continue building larger and
more integrated natural gas operations in markets where we can
establish a competitive advantage," said Mike L. Johnson, vice
president for natural gas and gas products.
Integration of the new assets with Conoco's existing New Mexico
operations in Maljamar, NM "creates one of the largest" gathering,
processing and transportation systems in the region, said Johnson.
"The existing Maljamar operation is primarily a low-pressure gas
system, while the LG&E assets are mostly high pressure,"
Johnson said. "The systems are highly complementary, and when
combined will create a business of sufficient size and scale to
make Conoco even more competitive in the region's natural gas
business." He said the acquisition also would leverage Conoco's
natural gas and natural gas liquids marketing programs in
Combined with LG&E's assets, Conoco will have 1,500 miles of
gathering systems with a capacity in excess of 300 MMcf/d, four
natural gas processing plants with 165 MMcf/d capacity and storage
capacity of 10 Bcf. Some of the LG&E assets that do not "fit"
with Conoco's natural gas business strategy will be sold, Johnson
Carolyn Davis, Houston
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