In a strategic move said to benefit both midstream energycompanies, CMS Field Services Inc. has swapped some of its naturalgas assets in Oklahoma and Kansas for some of Duke Energy FieldServices’ similar assets onshore and offshore Louisiana.

DEFS’ natural gas gathering and condensate measuring andtransportation assets onshore and offshore Louisiana were exchangedwith CMS Field Services’ assets in Oklahoma and Kansas, giving eachcompany more proximity to their other assets. The deal closed Dec.20 and was announced Friday. No financial details were disclosed.

“This transaction makes both strategic and economic sense forCMS Energy,” said Tim Young, senior vice president of the fieldservices division. In 1999, CMS Energy acquired Duke Energy’sPanhandle Eastern Pipe Line Co. and Trunkline Gas Co., and Youngsaid the swap gives CMS more opportunities to offer enhancedservices to “existing and potential shippers” on CMS-ownedproperties along the Gulf Coast.

In the deal, CMS obtained 10 offshore gas gathering laterals, aone-third ownership in the Atchafalaya Pipeline System and completeownership in a Patterson, LA condensate measuring facility. The 10offshore gas gathering laterals are connected to two offshorepipelines owned by CMS Energy: the Trunkline Gas Co.’s Terrebonnesystem and the Sea Robin Pipeline Co. The 39-mile-long AtchafalayaPipeline receives condensate from the Terrebonne system, while thePatterson measurement facility measures condensate transportedthrough the Atchafalaya pipe.

In return, Denver-based DEFS, a subsidiary of Duke Energy andPhillips Petroleum, obtained two Midcontinent natural gas gatheringsystems: the Bradshaw system in Kansas and the Roaring Creek systemin Oklahoma. DEFS also will pick up the Miles Hampton and Ulyssessystems in Kansas and the Christmas Lateral in South Texas.

“These assets are a great strategic fit with our assets in thearea, as they will specifically supply to plants with existingcapacity,” said Michael Bradley, senior vice president, DEFS’northern division. Bradley said the asset exchange supported thecompany’s growth strategy “optimizing and rationalizing assets” andgiving the company more flexibility.

CMS Field Services supplies regions of Louisiana, the Texas GulfCoast, West Texas, Central Texas, the Midcontinent and the RockyMountains, and owns approximately 5,000 miles of gatheringpipeline. DEFS, 70% owned by Duke and 30% by Phillips, operates in11 states and across five of the largest natural gas producingregions in North America. It owns and operates 71 plants and 57,000miles of pipe, with operating territory extending from westernCanada to the Gulf Coast.

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