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ENRON TO MANAGE GAS SUPPLY FOR BROOKLYN UNION
FOR IMMEDIATE RELEASE: Friday, February 13, 1998
HOUSTON - KeySpan Energy Corporation and Enron Capital & Trade Resources Corp. (ECT), a subsidiary of Enron Corp., today announced an agreement whereby ECT will provide gas supply management services for Brooklyn Union Gas, the primary subsidiary of KeySpan Energy. Under the terms of this agreement, which is subject to approval by New York Public Service Commission, ECT will assume responsibility for managing Brooklyn Union's interstate pipeline transportation, gas supply and storage.
ECT will ensure that Brooklyn Union's gas supply requirements are met, while guaranteeing Brooklyn Union a premium over savings and profits that Brooklyn Union has been able to achieve independently for its customers and shareholders, respectively. In the last three years, Brooklyn Union has led the field of independent gas supply managers by achieving more than $10 million annually in combined savings and profits from its New York hub's off-system sales in 17 states. Brooklyn Union typically purchases natural gas in excess of 140 billion cubic feet per year at an annual cost of approximately $500 million.
This arrangement between ECT and Brooklyn Union represents the largest natural gas distribution asset management transaction to date, and is one of the few transactions where complete control of the natural gas portfolio has been transferred to a third party.
Robert B. Catell, chairman, president, and CEO, KeySpan Energy Corporation, said, "The improved profitability gained from integrating the use of Brooklyn Union's regional assets into ECT's national gas trading and risk management operations illustrates the innovative strategies KeySpan is pursuing to bring value to our customers and shareholders."
"As the leading marketer of natural gas in North America, ECT has the expertise and capability to capture additional value inherent in Brooklyn Union's natural gas supply portfolio in the national gas market and bring those benefits home to the utility and its customers," said Kenneth L. Lay, chairman and CEO, Enron Corp. "ECT's guaranteed profits and savings for Brooklyn Union will serve as a model for other utilities throughout the country. We believe that this transaction will add significant momentum to the trend of gas distribution companies outsourcing their gas supply function in preparation for full retail competition."
On September 29, 1997, KeySpan Energy Corporation (NYSE: KSE) became the parent holding company of The Brooklyn Union Gas Company, the nation s fifth largest gas distribution company. KeySpan Energy Corporation has subsidiaries and interests in domestic oil and natural gas exploration and production, gas transmission, gas storage, and energy marketing and services. KeySpan has international investments in gas distribution, gas transmission and cogeneration. KeySpan owns, through Brooklyn Union, 66 percent of The Houston Exploration Company (NYSE: THX) and includes among its subsidiaries KeySpan Energy Services Inc. and KeySpan Energy Management Inc. KeySpan Energy Corporation plans to combine with the Long Island Lighting Company. This transaction is awaiting final approval of regulatory authorities. Other news about KeySpan Energy Corporation or Brooklyn Union can be accessed through websites at www.keyspanenergy.com or www.bug.com.
Enron is the world's leading integrated natural gas and electricity company. The company owns approximately $23 billion in energy related assets and delivers physical commodities and risk management and financial services to provide energy solutions to customers around the world. Enron's internet address is www.enron.com, and the stock is traded under the ticker symbol, "ENE."
For additional information please contact:
KeySpan Energy Corp.
Media - Robert Mahony
(718) 403-2503
Investor Relations - Jan Childress
(718) 403-3382
Enron Corp.
Shelly Mansfield
(713) 853-4589
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