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Duke Energy to Buy Union Pacific's Natural Gas Unit

November 23, 1998|From Bloomberg News

Duke Energy Corp. said it will buy Union Pacific Resources Group Inc.'s U.S. natural gas gathering, processing and marketing business for $1.35 billion, making Duke one of the largest companies gathering and selling natural gas.

The purchase, expected to close at the end of the first quarter, also would make Duke the largest U.S. producer of natural gas liquids--or propane, butane, ethane and natural gasoline--that are extracted from natural gas for various uses.

The sale allows Fort Worth, Texas-based Union Pacific to focus on searching for and producing oil and natural gas, and expanding those operations outside of the U.S. It also will allow Union Pacific to further reduce debt, the company said.

The transaction also includes a deal for Duke to gather and process much of Union Pacific's natural gas production for at least 10 years and for Union Pacific to allow Duke to sell most of its natural gas and gas liquids production for five years.

Duke, based in Charlotte, N.C., is the largest U.S. utility. Its Duke Energy Field Services Inc. unit, which recently has made several acquisitions, gathers and processes natural gas and sells natural gas liquids.

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