Conoco buys LG&E's western gas gathering assets

Conoco Inc., Houston, said Wednesday it is acquiring from LG&E Energy Corp., Louisville, Ky., gas gathering and processing assets in New Mexico, Texas, Oklahoma, and Montana. The acquisition will more than double Conoco's gas gathering capacity in southeastern New Mexico and increases Conoco's processing capacity in the region by 42%.


Conoco Inc., Houston, said Wednesday it is acquiring from LG&E Energy Corp., Louisville, Ky., gas gathering and processing assets in New Mexico, Texas, Oklahoma, and Montana. The acquisition will more than double Conoco's gas gathering capacity in southeastern New Mexico and increase Conoco's processing capacity in the region by 42%. Terms were not disclosed.

Conoco will get three gas processing plants in New Mexico and Texas, with a combined capacity of 86 MMcfd. Included are a gas storage facility and 1,200 miles of gas pipelines.

Mike L. Johnson, vice president for natural gas and gas products, said the integration of Conoco's existing New Mexico operations and the LG&E properties creates one of the largest gas gathering, processing, and transportation systems in southeastern New Mexico. The assets will be incorporated into Conoco's Maljamar, NM, gas operation.

"The existing Maljamar operation is primarily a low-pressure gas system, while the LG&E assets are mostly high-pressure," Johnson said. "The systems are highly complementary, and when combined will create a business of sufficient size and scale to make Conoco even more competitive in the region's natural gas business.''

The consolidated operations will include 1,500 miles of gathering systems with a capacity of more than 300 MMcfd; four gas processing plants with 165 MMcfd capacity; and storage capacity of 10 bcf.

Conoco said the consolidated operations would make it the second largest gas gatherer in the region, up from fifth.

Johnson said LG&E assets that do not fit Conoco's gas business strategy would be sold.

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