News Release
May 12, 1999

Duke Energy International, Plan New Gas AllianceEnergyAustralia

Discussions on forming an alliance to market natural gas are currently taking place between the nation’s largest electricity distributor, EnergyAustralia and Duke Energy Trading & Marketing, a division of leading global energy company, Duke Energy International (DEl).

DEl is the international development and asset management arm of Duke Energy Corporation, a global energy company based in Charlotte, North Carolina, in the United States. The company is a recognized leader in the energy industry, reaching into more than 50 countries to produce, transport, market and provide energy services.

Since relocating its Asia-Pacific headquarters from Hong Kong to Brisbane in July 1998, Duke Energy International (DEl) has signed a Memorandum of Understanding with the Tasmanian Government (May 1998) to investigate the feasibility of bringing natural gas to the island state; acquired the 627-km (390-mile) Queensland Gas Pipeline (June 1998); and acquired the rights to develop and operate the 795-km (494-mile) Eastern Gas Pipeline from Longlord to Sydney (December 1998). Construction of the pipeline will begin in August, with gas flowing into Sydney by September 2000.

In January 1999, DEl acquired BHP’s power business. This includes power plants in Port Hedland and Newman in Western Australia; a power plant in Auckland; an interest in the 1400km Goldfields Gas Transmission Pipeline in Western Australian; and additional development opportunities.

EnergyAustralia, with assets of over A$6.5 billion, serves some of Australia’s most dynamic commercial, manufacturing, resource and residential markets in NSW and Victoria. The company through its franchise market in metropolitan Sydney, the Central Coast, Newcastle and the Hunter Valley currently serves over 1.3 million customers.

EnergyAustralia has been positioning itself since the deregulation of the NSW electricity industry and the commencement of the national market, to build significant capability as a multi-service provider.

Through its various business groups, EnergyAustralia operates major call center operations in Sydney and Newcastle; utility metering, testing and calibration laboratories and service units operating in its own franchise, Australian and overseas markets; and a major construction business which principally works in the energy sector.

EnergyAustralia is also one of the members of the Downtown Utilities group, which is a partner of PowerTel Ltd, currently involved in a fibre optic network construction program between Brisbane and Sydney, and Sydney to Melbourne. EnergyAustralia’s construction group, Enerserve has signed two contracts with PowerTel for the rollout of the fiber optic network between Newcastle - Sydney - Melbourne.

The potential for the alliance is significant. The completion of DEIs Eastern Gas Pipeline in September 2000 will bring a competitive product to Sydney’s doorstep to coincide with deregulation of the gas market. The EnergyAustralia DEl alliance will provide natural gas to a potential market of more than one million commercial, manufacturing and residential customers.

Duke Energy International has unparalleled expertise in providing customized energy solutions along the energy value chain while EnergyAustralia stands out as the logical retail partner in the natural gas alliance.

Contact: Phil Neat
Phone: 02 9269 2172
24 Hour Phone: 0419 013 798
Contact: Michelle Barry
Phone: 07 3334 5800
24 Hour Phone: 0414 790 480