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Beginning in late 1999, Maritimes & Northeast Pipeline will bring new offshore natural gas supplies to the Northeast U.S. and Canadian Maritimes Provinces. Through its Algonquin HubLine and Cross Bay Pipeline projects, Duke Energy will expand natural gas services to the Northeast from both Canadian and U.S. supplies.
In the Northeast and elsewhere, pipelines today are closely linked in the energy value chain with electric assets. Energy marketers link assets by supplying natural gas fuel for power generation and marketing both natural gas and electricity to end users. Virtually all new power generation proposed for the Northeast is low-cost, clean burning natural gas-fired generation.
In 1999, Duke Energy will complete the sale of Panhandle Eastern Pipe Line Company, Trunkline Gas Company, related natural gas storage facilities and Trunkline LNG Company to CMS Energy for $1.9 billion in cash and $300 million in assumed debt. Abundant and growing natural gas transportation capacity into the Midwest flattened growth potential, and the sale enables Duke Energy to redeploy the capital to markets with greater growth and earnings potential.
One such market is Australia, where Duke Energy International announced three major purchases in 1998: the 389-mile Queensland Pipeline; the 500-mile Eastern Gas Pipeline, which will be built to connect major natural gas production regions with Sydney, Australia's largest city; and the electric power assets and pipeline interest of Broken Hill Proprietary Company Limited. Duke Energy International has targeted Australia to develop natural gas pipeline capabilities in conjunction with power generation, energy marketing and other services.
Duke Energy Field Services (Field Services) continued to lead a nationwide trend of consolidation in the natural gas gathering and processing industry. In 1998, Field Services added 1,500 miles of gathering pipelines which connect producers, processors, transporters and marketers. In 1999, Field Services expects to close on its $1.35 billion purchase of Union Pacific Resources' natural gas gathering, processing, fractionation and NGL pipelines. Completed and pending transactions exceed $1.5 billion in value and will make Duke Energy the largest U.S. producer of NGLs, one of the largest natural gas gatherers and marketers and one of the largest NGL marketers.
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Donnye Moore, left, and Tony Most inspect construction progress of Maritimes & Northeast Pipeline where it crosses the Great Works River in Maine. Designed to transport 400 MMcf/d, from the Sable Island offshore production area to the Northeast U.S. and Canada, the pipeline is projected to be in service by November 1999. Duke Energy owns a 37.5 percent interest in the pipeline.
Duke Energy Chairman, President and CEO Rick Priory traveled to Australia to visit new Duke Energy facilities and employees, and to strengthen the company's relationships with that country and its people.
Aguaytia Energy began commercial operation in 1998 as Peru's first integrated energy project, comprising natural gas transportation, storage, processing and fractionation along with power generation and transmission: a clean, efficient, integrated approach to energy. Aguaytia moves energy - as both natural gas and electricity -
from the jungle of Central Peru to cities and towns in other regions. Duke Energy owns a 21.9 percent interest in the project.
Duke Energy is leading a major expansion of facilities to serve producers in the Eastern Gulf of Mexico. The Mobile Bay Processing Plant incorporates a 40 MW cogeneration plant and showcases Duke Energy's capabilities in developing natural gas/electric facilities.
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