ChevronTexaco And Dynegy Decide to Terminate Natural Gas Agr

ChevronTexaco Corp. is in discussions with Dynegy to negotiate an early termination of the contracts under which Dynegy Marketing and Trade purchases substantially all of ChevronTexaco's lower-48 U.S. natural gas and supplies the natural gas requirements of ChevronTexaco refineries and other corporate facilities. These discussions were initiated at Dynegy's request following Dynegy's decision to conduct an orderly exit from the gas marketing and trading business.

These discussions do not involve the natural gas processing and liquids agreements between ChevronTexaco and Dynegy Midstream Services, the company's natural gas liquids business unit involved in gathering, processing, fractionation, marketing or feedstock supply.

The current term of the natural gas agreements runs through August 2006. ChevronTexaco and Dynegy are discussing the possibility of an early termination accompanied by an orderly transition, but an agreement has not been reached at this time. Dynegy has said it will continue to meet all its contractual obligations to ChevronTexaco unless and until other arrangements have been agreed upon and made. A key part of the discussions is to ensure that any agreement reached would have no adverse effect on customers.


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