News Release
Jan. 07, 2002


BOSTON and NEW YORK – Islander East Pipeline Company L.L.C. received a positive preliminary determination from the Federal Energy Regulatory Commission (FERC) to construct, own and operate approximately 50 miles of interstate natural gas pipeline in Connecticut and on Long Island, N.Y. A companion proposal filed by Algonquin Gas Transmission Company also received preliminary approval for increasing throughput of more than 13 miles of existing pipeline and constructing a new compressor station in CheshireConn. 

Islander East is an equally owned, limited liability company formed between the subsidiaries of KeySpan Corporation and Duke Energy. The collaboration project is expected to provide 260,000 dekatherms a day of environmentally preferred natural gas, which is enough fuel to cool and heat 600,000 homes in Long Island and New York City

Increased gas transmission capacity is necessary to meet the projected demand for natural gas in the Northeast. Islander East, projected to be in service by 2003, will transport much needed supplies of natural gas to these Northeast markets to heat homes and businesses through local distribution companies and to fuel new and existing gas-fired electric generating stations.

“FERC’s preliminary determination is the first milestone in the regulatory process and is key to the Islander East project moving forward,” said Robert B. Evans, president of Duke Energy Gas Transmission (DEGT). “By interconnecting with the growing natural gas pipeline network, Islander East will efficiently and cost-effectively deliver additional volumes of natural gas from fields being developed offshore Atlantic Canada to meet the growing demand in Connecticut and New York.” 

In the preliminary determination, FERC concluded that the Islander East and Algonquin proposals are in the public convenience and necessity, and that the project will fill an immediate market need, by serving expected growth in the Northeast market area. FERC also stated that the Islander East project would increase the reliability and flexibility of the interstate pipeline grid. Final approvals and certificates are dependent on a favorable environmental review of the proposals. FERC staff will be studying the environmental impacts of the project and issuing a draft environmental impact statement in the near future.

“Approval of Islander East is key to the energy future of Connecticut and the New York region,” said Robert B. Catell, chairman and chief executive officer of KeySpan. “By introducing Nova Scotia gas to the region, we gain access to the Northeast’s most significant new supply of energy right at our back door. A new source of gas strengthens our security of supply and competitive pricing opportunities. The Islander East Pipeline is part of our strategy to expand the use of natural gas throughout Long Island for commercial and residential customers.”

The proposed Islander East mainline pipeline will extend from Connecticut across Long Island Sound to Wading RiverN.Y., with proposed connections to KeySpan’s Long Island delivery system. Islander East facilities will consist of approximately 50 miles of new, 24-inch diameter pipeline. Additionally, Algonquin is proposing certain upgrades to its system in Connecticut that will interconnect with Islander East -- approximately 13.7 miles of existing parallel pipelines will be upgraded along with the new Cheshire compressor station. Algonquin is a unit of DEGT. 

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 BrooklynBoston 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:

DEGT, the Houston-based Duke Energy business unit responsible for the company’s interstate natural gas pipeline operations, owns and operates 12,000 miles of interstate natural gas pipelines known as Texas Eastern Transmission, LP; Algonquin Gas Transmission Co.; East Tennessee Natural Gas Co.; and with others, owns Maritimes & Northeast Pipeline and the Gulfstream Natural Gas System. Together, these companies transport 8 percent of the natural gas consumed in the United States.

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 CharlotteN.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:

Contact: John Sheridan, Duke Energy
Phone: 617,560-1444
24 Hour Phone: 704/382-8333
Contact: Andrea Staub, KeySpan
Phone: 516/545-5052
24 Hour Phone: n/a
Email: n/a