News Release
Dec. 21, 1998

Duke Energy's board of directors today adopted a shareholder rights plan, which is subject to approval by the North Carolina Utilities Commission and the Public Service Commission of South Carolina. $270 MILLION PIPELINE IN AUSTRALIA

Duke Energy International, LLC, (DEI) the international development and asset management arm of Duke Energy, has acquired the rights to develop and operate the 500-mile Eastern Gas Pipeline, the company announced today.

DEI acquired 100 percent of the shares of Eastern Gas Pipeline Company -- previously owned jointly by BHP Petroleum of Melbourne and Westcoast Energy of Canada.

Project planning and design are virtually complete and all necessary environmental and regulatory approvals are in place. DEI plans to begin pipeline construction in July 1999 and expects gas to be flowing from the Gippsland Basin near Sale, Victoria, to Sydney, New South Wales, Australia’s largest city, by the middle of 2000. The Gippsland Basin is eastern Australia’s largest natural gas supply region.

Pipeline construction should be complete before Sydney hosts the Olympic Games in September 2000, thereby providing the city with an important additional source of natural gas. The 18-inch diameter pipeline initially will have the capacity to transport 172 million cubic feet of natural gas per day.

Bruce A. Williamson, DEI president and chief executive officer, said the $270 million Eastern Gas Pipeline project is another significant and strategic step for DEI in Australia. "DEI’s involvement in this important project follows and complements our other major initiatives in Australia this year: the purchase of the Queensland Gas Pipeline in June and last week’s acquisition of BHP Power. The Eastern Gas Pipeline project may complement bringing natural gas to the state of Tasmania as well, yet another Pacific Rim prospect we’re studying.

"We see Australia as an important and exciting growth region for Duke Energy. The changes in the Australian energy industry are at the leading edge of competition reform. Duke Energy, as a truly integrated energy company, can contribute a great deal to this region," Williamson said.

Michael McDanold, DEI executive vice president and managing director of the company’s Asia Pacific region, said the Eastern Gas Pipeline will be Australia’s most significant interstate gas link. "The pipeline will enable gas trading between the country’s two most populated states -- Victoria and New South Wales -- and open the way for genuine competition for gas and other forms of energy."

McDanold said DEI is committed to proceeding as quickly as possible with the pipeline development, seen as a crucial step in the development of a national gas market.

"We will ensure there is a smooth project transition from Westcoast/BHP to DEI and we will continue to work closely and cooperatively with all parties -- government and regulatory bodies, as well as groups and individuals along the pipeline route," he said.

Duke Energy International develops, owns and operates energy projects worldwide. Its capabilities include natural gas exploration, production, processing, transportation and supply, and generation, delivery and marketing of electric power and thermal energy.

DEI is a subsidiary of Duke Energy, (NYSE:DUK), a global energy company based in Charlotte, North Carolina, with more than $26 billion in assets. Duke Energy companies provide electric service to approximately 2 million customers; operate pipelines that deliver 12 percent of the natural gas consumed in the United States; and are leading marketers of electricity, natural gas and natural gas liquids. Globally, the companies develop, own and operate energy facilities and provide engineering, management, operating and environmental services. Additional information about the company is available on the Internet at: www.duke-energy.com.

Contact: Danny P. Gibbs
Phone: 704 373-6680
24 Hour Phone: 704 382-8333
Email: dpgibbs@duke-energy.com