Oneok Inc. closed its $307.7 million acquisition of Dynegy’smidstream assets yesterday, and now is focusing on its other majorMidcontinent deal with Kinder Morgan.

The assets involved in the Dynegy deal include eight gasprocessing plants, interests in two other plants and 7,000 miles ofgas gathering and intrastate transmission systems in Oklahoma,Kansas and the Texas Panhandle. Current processing plant throughputis 240 MMcf/d with a capacity of 375 MMcf/d. Gas liquids productionaverages 25,000 b/d, more than doubling Oneok’s existingproduction. Even without synergies, Oneok said this deal isexpected to be accretive to this year’s earnings.

About 75 employees will be added to the ONEOK workforce as partof the acquisition. The majority will be in field operations inWestern Oklahoma, the Texas Panhandle and Southern Kansas.

“This transaction is consistent with our strategy of expandingour ownership of natural gas processing, gathering and transmissionpipelines in the Midcontinent area where Oneok’s existing assetsare concentrated,” said ONEOK President David Kyle. “It is aperfect complement to those existing natural gas assets, which willallow us some excellent consolidation opportunities and will reduceour commodity risk exposure because the majority of the processingplant assets being acquired operate under percent-of-proceedsstyled contracts.”

Oneok also has pending a definitive agreement with Kinder MorganInc., to purchase all of KMI’s gas gathering and processing inOklahoma, Kansas and West Texas for $114 million. Through the KMI deal(see Daily GPI, Feb. 9), Oneok willassume the operating lease associated with the Bushton, KS, gasprocessing plant; and assume long-term capacity commitments on NaturalGas Pipeline Co. of America and on Kinder Morgan Interstate GasTransmission. It represents in excess of 12,000 miles of pipeline, sixgas processing plants with capacity of 1.26 Bcf/d and 10.5 Bcf ofstorage. The deal also includes KMI’s (former KN Energy’s) entiremarketing and trading operation. Closing is expected in a few weeks.

©Copyright 2000 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.