Dynegy last week drew a sharper bead on energy convergence,jettisoning all of its U.S. crude oil operations.

The company sold its U.S.-based crude oil business to SeminoleTransportation and Trading Inc. The sale comprises Dynegy’s entireU.S. crude oil enterprise, including transportation and marketingoperations and assets in Texas, Oklahoma and Louisiana. Financialterms were not disclosed.

“The decision to seek an alternative for our crude oil businessis based upon our long-term corporate strategy to redeploy capitalinto our energy convergence businesses,” said CEO Chuck Watson.”This sale will further strengthen our financial position,supporting the continued expansion of our generation portfolio instrategic locations throughout the country and thereby move uscloser to our goal of capturing a 10 to 15% share of the wholesalepower market.”

Dynegy’s principal businesses are energy convergence, midstreamnatural gas liquids and transmission and distribution. They operatethrough the company’s marketing and trade, natural gas liquids, andtransmission and distribution subsidiaries.

The acquisition includes Dynegy Crude Gathering and MarketingInc., Dynegy Crude Gathering Services Inc., and Dynegy Oil PipelineCo. Seminole operating subsidiary Seminole Transportation andGathering Inc. will be the primary operating entity known as STG.

“The strategic location of the main lines and related storagefacilities connecting into Cushing, OK, are a significant part ofthis acquisition,” said Thomas Kivisto, STG CEO. “Cushing is thelargest crude trade hub in the United States, and the designateddelivery point for the NYMEX crude oil futures contracts.”

STG acquired 28 oil transports, 29 pipeline injection stations,1.9 million barrels of terminal-owned storage and 2,000 miles ofproprietary and common carrier gathering pipelines. Of those 1.9million barrels of storage, 792,000 are in Cushing. STG providescrude oil gathering, transportation, marketing and hedging servicesto producers and offers storage and transportation services torefiners and other crude oil marketers in the Mid Continent andGulf Coast areas.

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