News Release
Sept. 15, 1998

DAUPHIN ISLAND GATHERING PARTNERS SIGN GATHERING AGREEMENTS

HOUSTON — Dauphin Island Gathering Partners (DIGP) and the VK 823 "Virgo" producers have signed definitive agreements committing deep-water natural gas supplies to the DIGP system from a four-block unit around Viosca Knoll Block 823 offshore Gulf of Mexico.

The producers and DIGP have developed a unique arrangement that provides deep-water wellhead production handling services for Virgo and third-party producers. Downstream gathering and transmission services will be provided by DIGP. DIGP has rights to the Virgo platform facilities, which will serve as a strategic hub to attach new gas supplies from other deep-water developments.

The Virgo producers have commissioned the design and construction of a fixed platform that will be set in 1,130 feet of water in Viosca Knoll Block 823. Construction of the platform is underway, and pipeline construction is planned for mid-1999 for an anticipated production startup of late 1999.

DIGP will build a 17-mile, large-diameter gathering lateral to connect the Virgo platform to the existing DIGP system in the vicinity of Main Pass-East Addition Block 225.

Elf Exploration Inc. is the operator of the Virgo Project, and other partners include Coastal Oil and Gas Corp., Nippon Oil Exploration U.S.A. and Pogo Producing Company.

DIGP is a 260-mile pipeline system designed to gather natural gas supplies from the prolific eastern Gulf of Mexico producing region. It is the only system in the region that provides market outlets to both Venice, La., and Coden, Ala. DIGP placed Phase I of its system expansion into service in April, making it the first eastern Gulf of Mexico pipeline to transport deep-water gas production to onshore facilities in Alabama. The Phase II expansion, which was announced in the second quarter, is expected to be completed in October and will provide delivery capability to onshore pipelines of 1.1 billion cubic feet per day.

DIGP is a partnership comprised of subsidiaries of Duke Energy Corporation (37.3 percent), MCN Energy Group Inc. (34.5 percent), The Coastal Corporation (13.6 percent), Consolidated Natural Gas Company (13.6 percent), and Titan Offshore, Inc. (1 percent).

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