Duke Energy Gas Transmission (DEGT) announced it has enteredinto a definitive agreement to purchase Market Hub Partners (MHP)and its 23 Bcf of natural gas salt cavern storage. The unit isbeing spun off by NiSource Inc. as a result of its planned mergerwith Columbia Energy.

Duke will pay $250 million in cash and assume $150 million indebt. NiSource isn’t likely to miss the capacity since it will gain650 Bcf with Columbia.

This new line of business for DEGT has significant expansioncapability. The stock purchase is expected to close later thisyear, pending Federal Trade Commission approval.

“We are enthusiastic about our entry into this business that hasan increasingly important value in the natural gas marketplace,”said Robert Evans, president of DEGT. “The characteristics of thecombined salt cavern storage facilities with delivery capabilitiesof up to 2 Bcf/d and injection capabilities of up to 1 Bcf/d arewell suited to meet load swings brought about by gas-fired electricpower generation and the peak winter heating load growth of localdistribution companies.

“Additionally, the location of the Moss Bluff and Egan storagefacilities provide additional supply security to mitigate theeffects of severe weather conditions in the Gulf Coast supplyregion.”

“Through our ongoing storage contracts with MHP, we willcontinue to derive optionality from those assets,” said Gary L.Neale, NiSource chairman. He said the sale was in preparation forthe completion of its merger with Columbia, which has over 650 Bcfof storage capacity in its key market areas.

The Moss Bluff storage facilities are in Liberty County,TX, andthe Egan storage facilities are in Acadia Parish, LA. MHP is alsodeveloping high deliverability salt cavern storage facilities inCopiah County, MS and Tioga County, PA. MHP is a subsidiary ofEnergyUSA, a wholly owned subsidiary of NiSource Inc.

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