News Release
Jan. 29, 2001

ISLANDER EAST PIPELINE ANNOUNCES OPEN SEASON

BOSTON AND BROOKLYN, N.Y. – Islander East, a proposed 40-mile pipeline that will bring natural gas from Connecticut to Long Island, N.Y., has announced an open season for transportation services.

An equally owned, limited liability company formed between subsidiaries of Duke Energy and KeySpan Corporation, Islander East Pipeline L.L.C. will accept from interested parties non-binding nominations from Jan. 29, 2001, to Feb. 28, 2001. The firm transportation services offered will be provided on a non-discriminatory, open-access basis.

Originating from Algonquin Gas Transmission Company’s system, Islander East will consist of approximately 40 miles of 24-inch diameter and 30-inch diameter pipeline extending from Connecticut across Long Island Sound, to Wading River, N.Y., and other points on Long Island. Algonquin is a unit of Duke Energy Gas Transmission (DEGT).

Islander East will enhance access to virtually every major supply basin in North America, including recently developed natural gas reserves near Sable Island off the coast of Nova Scotia in Atlantic Canada through Algonquin’s proposed interconnection with Maritimes & Northeast Pipeline. Supplies from Atlantic Canada are expected to become the major source of incremental natural gas for the northeastern United States.

Islander East will connect with KeySpan Energy Delivery Long Island, a principal subsidiary of KeySpan Corporation. The pipeline, expected to begin operating in 2003, initially will provide 250,000 dekatherms/day of vital gas capacity – enough to heat 600,000 homes – to the Long Island and New York City energy markets.

"Islander East enhances KeySpan’s position as a major energy supplier in the Northeast. The pipeline will dramatically increase and diversify our access to gas supplies, enhance the competitive price of gas for our customers in the Northeast, and help reduce the cost of electric-power production," said Robert B. Catell, chairman and chief executive officer of KeySpan. "It will also mean greater energy reliability, flexibility and security for energy consumers on Long Island and in the New York City area."

"Demand for natural gas in Long Island and New York City is growing at a greater rate than anywhere else in the country and Islander East will deliver critical supplies of natural gas to those areas," said Robert Evans, president of DEGT, which will be the project manager for Islander East. "This growth is expected to continue over the next several years as more homes convert to natural gas and as gas-fired electric generating plants are built on Long Island."

A member of the S&P 500, KeySpan Corporation (NYSE: KSE) is the largest distributor of natural gas in the Northeast, with 2.4 million gas customers and more than 13,000 employees. KeySpan is also the largest investor-owned electric generator in New York State and operates Long Island’s electric system under contract with the Long Island Power Authority for its 1.1 million customers. With headquarters in Brooklyn, Boston and Long Island, KeySpan also manages a portfolio of service companies. They include: KeySpan Energy Delivery, the group of regulated natural gas utilities; KeySpan Home Energy Services, a full-service energy company for residential and small commercial customers; and KeySpan Business Solutions, a full-service energy company for business customers. KeySpan also has strategic investments in natural-gas exploration and production, pipeline transportation, distribution and storage, as well as Canadian gas processing and fiber-optic cable. For more information about the company, visit KeySpan’s Web site at: http://www.keyspanenergy.com

Duke Energy Gas Transmission manages 12,000 miles of natural gas pipelines including East Tennessee Natural Gas Co., Texas Eastern Transmission Corp., Algonquin Gas Transmission Co. and with other partners, Maritimes & Northeast Pipeline. DEGT also owns natural gas salt cavern facilities in Texas and Louisiana with a total storage capacity of 23 billion cubic feet.

Duke Energy, a diversified multinational energy company, creates value for customers and shareholders through an integrated network of energy assets and expertise. Duke Energy manages a dynamic portfolio of natural gas and electric supply, delivery and trading businesses -- generating revenues of more than $49 billion in 2000. Duke Energy, headquartered in Charlotte, N.C., is a Fortune 100 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: www.duke-energy.com

Contact: John P. Sheridan, Duke Energy
Phone: 617/560-1444
24 Hour Phone: 704/382-8333
Email: JPSHERIDAN@DUKE-ENERGY.COM
Contact: Edward Yutkowitz, Keyspan
Phone: 718/403-2503
24 Hour Phone: n/a
Email: n/a