Partners

Tenaska, Inc. and Diamond Generating Corp., a subsidiary ofMitsubishi, have formed Tenaska Diamond, LP, a new power generationpartnership. Through the new company, the partners will own fourdomestic power generating facilities totaling 3,500 MW of capacity.Tenaska and Diamond have also entered into a non-exclusive,strategic alliance agreement for future power generatingdevelopment.

Market Hub Partners LP (MHP) of Houston is holding an openseason for its Copiah high-deliverability salt cavern storageproject in Copiah County, MS, today through 3 p.m. CDT Friday, May26. The facility will have 3 Bcf of capacity available and willoffer 5- to 15-day withdrawal and 15- to 30-day injection services.Customers will be able to turn capacity up to 18 times per year.Initial services will be available April 2003.

DPL Inc. announced it has sold its financial interest in MarketHub Partners (MHP) to a subsidiary of NiSource for $29 million incash. This sale follows DPL’s recent announcement of the sale ofits natural gas retail distribution business to Indiana Energy. MHPis a natural gas storage company headquartered in Houston. DPL wasrequired to separate its electric business units with the Julypassage of Ohio electric restructuring legislation. In so doing,the company said it was going to explore options for its gasbusinesses while focusing on electric generation. DPL said it hascontinued to expand its natural gas-fired generation business withthe addition of 475 MW through two plans called “Phases One” and”Two.” Two more phases, which have yet to be announced, willincrease that capacity by 320 MW. These expansions are occurring inboth Ohio and Indiana, DPL said, and will be immediately accretiveto earnings as these units come online starting in the summer of2000.

Kinder Morgan Energy Partners LP (KMP) continued amassing gasassets yesterday, buying an indirect 33.3% interest in TrailblazerPipeline from an affiliate of Columbia Energy Group for $38 millionin cash. The move comes only a week after Kinder Morgan Inc. (KMI),parent of the general partner in KMP, announced plans to transfer$700 million in former KN Energy assets to the company, includinganother 33.3% share in Trailblazer.

Kinder Morgan Energy Partners, LP announced that Thomas A.Bannigan has been named President of its products pipelineoperations. Bannigan will also continue in his current role asPresident of Plantation Pipe Line Company, which is 51% owned byKinder Morgan. He succeeds William V. Allison who has assumedresponsibility for Kinder Morgan’s natural gas pipeline operations.

Enterprise Products Partners LP of Houston completed itsacquisition of Tejas Natural Gas Liquids LLC from Shell Oilaffiliate Tejas Energy LLC and made a long-term gas processingagreement with Shell for its Gulf of Mexico production. As a resultof the deal, Tejas Energy now owns 17.6% of Enterprise. The dealforms a fully integrated Gulf Coast NGL processing, fractionation,storage, transportation and marketing business.

Pioneer Natural Resources USA Inc. filed a preliminary proxystatement with the SEC regarding a proposed merger with the limitedpartners of 25 publicly-held Parker & Parsley limitedpartnerships. According to the plan, each partnership that approvesthe proposals will merge with Pioneer and their partnershipinterests will be converted into the right to receive cash. At thesame time, Pioneer also is offering to acquire 21 non-publiclimited partnerships and 13 privately-held employee partnershipsthrough mergers for cash. Pioneer is the sole or managing generalpartner of all of the partnerships. As a result of the mergers,Pioneer will acquire additional working interests in wellspredominantly located in the Spraberry field in the Permian Basinof West Texas. If approved, the mergers are expected to add twomillion barrels of oil equivalent production next year. The amountof cash Pioneer USA will pay for the partnership interests will bebased on the partnerships’ reserve value plus net working capital(less expenses and fees of the mergers) as of Sept. 30. Undercurrent Nymex futures strip prices, Pioneer estimates that its cashoffer would be $60 million. However, it also said it will consideroffers from third parties to purchase any partnership or itsassets. Persons interested in making an offer should contactTimothy L. Dove or Mark L. Withrow at (972) 444-9001 before Nov. 1.

Leviathan Gas Pipeline Partners and Tejas Energy unveiled NemoGathering Co. yesterday. The new company, which is 66% owned byTejas and 33% owned by Leviathan, has entered into a gas gatheringagreement with Shell Deepwater Development Inc. and will constructa 24-mile, 20-inch gas gathering line connecting Shell’s plannedBrutus development with the existing Manta Ray Offshore GatheringSystem. Tejas will operate the line once it is constructed.

Merger partners Sempra Energy and KN Energy contend that QuestarPipeline, which claims the marriage would subvert gas and electriccompetition in southern California, is seeing monsters where noneexist. Nevertheless, they agreed to make certain concessions toQuestar to remove a potential threat to their merger transaction.