News Release
July 20, 1998


HOUSTON - - Duke Energy Transport and Trading Company has signed a letter of intent to purchase certain U.S.-based crude oil transportation and marketing operations from Dynegy Inc. The sale is expected to close by the end of the third quarter.

Under the agreement, Duke Energy will acquire Dynegy’s crude oil pipeline, gathering and marketing business in Oklahoma, Texas and Louisiana. Dynegy’ s crude oil operations in Canada are not affected by the transaction.

"Duke Energy Transport and Trading’s strategy is to continue to acquire and consolidate assets in the crude oil marketing and transportation industry. This agreement to buy Dynegy’s crude oil transportation and trading operations will expand our market presence significantly," said Jim Mogg, vice chairman. "In addition, these assets are an excellent fit with our existing pipeline systems in North Texas and Oklahoma and will extend our system into Cushing, Okla., which will increase our deliverability into the country’s primary crude oil trading market. The financial performance of our crude oil business has been steadily increasing and these assets will help the company continue that growth trend."

Duke Energy Transport and Trading currently owns and operates approximately 2,300 miles of crude oil and natural gas liquids pipelines, transporting 106,000 barrels per day. In addition, the company now purchases and markets approximately 75,000 barrels per day of crude oil from the wellhead.

Chuck Watson, chairman and chief executive officer of Dynegy Inc., said, "The sale of our U.S. crude oil business is consistent with our corporate strategy to redeploy capital to our core businesses. Although we have been pleased with the recent financial performance of our crude oil business, we believe that growth opportunities in natural gas, natural gas liquids, power generation and energy marketing are significant and will offer greater returns for our shareholders over time. Proceeds from this sale, along with other discrete divestitures of non-strategic assets such as the pending sale of Ozark Gas Pipeline, will strengthen our financial position and supplement our cash flow available for reinvestment as the dynamic restructuring of the electric power industry accelerates."

"We will continue to operate the crude oil gathering and marketing operations in Canada since those operations are more strategically linked to the mid-stream business we are growing in Alberta," Watson concluded.

The primary assets included in the sale are Dynegy’s on-system gathering company in Oklahoma, Dynegy’s Grand Lake Liquids System in Louisiana and the assets of the Graham Gathering System in North Texas. The sale also includes the company’s 150,000 barrels per day crude oil supply, transportation and marketing business.

Dynegy Inc. (NYSE:DYN), (formerly NGC Corporation) is one of the leading marketers of energy products and services in North America. The name Dynegy reflects the company’s evolution from a natural gas marketing company to a dynamic energy company with a full energy network to meet the growing challenges of the energy market of the future. Through its leadership position in gathering, processing, transportation, independent power generation and marketing of energy, the company provides energy solutions to its customers in North America, the United Kingdom, Colombia and Australia.

Oklahoma City-based Duke Energy Transport and Trading Company, a subsidiary of Duke Energy, operates crude oil and natural gas liquids pipelines and markets and trades crude oil.

Duke Energy (NYSE:DUK) is a global energy company with more than $24 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. Contact Duke Energy on the World Wide Web at

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