DEFS Finishes 2000 With Multiple Transactions

Duke Energy Field Services (DEFS) finished off 2000 with a bang by completing 
three year-end asset transactions. First, the company finalized the $91 
million sale of natural gas liquid (NGL) pipeline assets to TEPPCO Crude 
Pipeline, L.P., then it completed the purchase of certain natural gas 
pipeline assets from El Paso Field Services in two separate deals for an 
undisclosed sum. 

The assets sold to TEPPCO include the Panola Pipeline and the San Jacinto 
Pipeline, both of which are NGL pipelines. Under the agreement, TEPPCO also 
agreed to take over the lease of a 34-mile condensate pipeline. The three 
pipelines included in the sale all originate at DEFS' East Texas Plant 
Complex located in Panola County, TX. 

"This sale underscores our strategy of growing earnings through our TEPPCO 
master limited partnership," said Jim Mogg, CEO of DEFS. "In 2000, we almost 
doubled the distribution that DEFS received as the general partner of TEPPCO 
Partners, L.P., and at the same time increased the distribution to limited 
partnership unitholders." 

In the second transaction, which the company completed on Dec. 28, 2000, DEFS 
acquired 100% of Gas Transmission Teco, Inc.'s common stock. The company owns 
interests in the 500-mile Teco intrastate natural gas pipeline in Texas, and 
was purchased from El Paso Field Services. 

Included in the assets, DEFS gained a 50% interest in the El Paso-operated 
West Texas Line which travels from Waha to New Braunfels, a 100% interest in 
the Guadalupe Line that travels from New Braunfels to Dewville, and a 50% 
interest in the MidTex Line from Dewville to Katy. DEFS also received several 
supply lines and related assets with the acquisition. 

DEFS said the lines combined have a 250 MMcf/d of natural gas capacity, and 
extend from Waha in West Texas to Katy. The company also noted that the lines 
interconnect five DEFS plants with a combined processing capacity of 640 
MMcf/d. 

"The timely addition of this strategic system provides DEFS with increased 
marketing opportunities for the gas from these plants," said Mogg. "The lines 
also allow DEFS new access to the growing San Antonio/Austin corridor." 

In DEFS' third end of the year transaction, the company acquired El Paso 
Field Services' 50% interest in the 265-mile San Jacinto natural gas 
pipeline. The transaction brings DEFS' ownership up to 100%. The San Jacinto 
line provides gas gathering and transportation services along the Texas Gulf 
Coast, with delivery to a third party and two DEFS gas processing plants. 

DEFS was formed last year when Duke Energy and Phillips Petroleum combined 
their natural gas gathering and processing businesses. Duke Energy holds a 
70% stake in the company while Phillips retains a 30% share.