Dominion News Releases

September 4, 2001

Dominion, Williams Sign Infrastructure Agreement For Devils Tower

This agreement is the first of its kind for the Gulf of Mexico. Williams will own the floating production facility as well as the gas and oil export pipelines. Dominion is operator of Devils Tower field, with 75 percent working interest. Pioneer owns the remaining 25 percent working interest.

Dominion had previously contracted with SparTEC, a subsidiary of J. Ray McDermott, to provide the truss spar floating production facility. Williams will assume responsibility for payments due under the SparTEC contract as part of the agreement.

Williams will install the export pipelines. The 18-inch diameter oil export line, “Mountaineer Oil Pipeline,” will extend from Mississippi Canyon 773 to Main Pass 34, approximately 120 miles. The gas export line, “Canyon Chief Gas Pipeline,” will include an 18-inch deepwater section from Mississippi Canyon 773 to Main Pass 261, approximately 90 miles. As part of this agreement, Dominion will produce oil and gas from Devils Tower through the Williams-owned infrastructure.

Duane Radtke, president and chief executive officer of Dominion E&P, said: “This is an excellent deal for all of the companies involved. Dominion is able to significantly enhance the field economics by monetizing the potential third party use of the infrastructure. It will also allow Dominion to focus our efforts and our capital resources on our core business of exploration and production. Williams gains a significant contract to anchor these critical infrastructure investments in a deepwater area that is ripe for further development.”

Steve Springer, senior vice president and general manager of Williams’ Midstream Operations, said: “Today’s transaction is consistent with our focused growth strategy which includes the Deepwater Gulf of Mexico. We’re pleased to have both Dominion and Pioneer as our anchor customers and plan to complement their continued successes in deepwater. This new business also adds significant value to Williams’ Mobile Bay infrastructure and complements Williams’ ability to serve growing natural gas demand in the Southeast United States.”

Dominion, headquartered in Richmond, Va., is one of the nation’s largest producers of energy, with a production capability of 3 trillion British thermal units of energy per day. The company has a power generation portfolio of more than 21,000 megawatts, which is expected to grow to more than 28,000 megawatts by 2005. Dominion is one of the largest independent oil and natural gas exploration and production companies in North America, with 2.8 trillion cubic feet of equivalent reserves. The company has 7,600 miles of interstate natural gas pipeline and a delivery capability of 6.3 billion cubic feet per day. 

In addition, the company operates the nation’s largest underground natural gas storage system, with over 950 billion cubic feet of storage capacity. Dominion serves nearly 4 million retail natural gas and electric customers. Dominion also has a managing equity interest in Dominion Fiber Ventures LLC, owner of Dominion Telecom. Dominion Telecom is expanding its fiber-optic network from 35,000 fiber miles (3,600 route miles) to more than 800,000 fiber miles (9,000 route miles). For more information about Dominion, visit the company's web site at www.dom.com.

Williams, through its subsidiaries, connects businesses to energy, delivering innovative, reliable products and services. Additional information on Williams is available online at www.williams.com.

This press release contains forward-looking statements. The company wishes to caution readers that the assumptions which form the basis for forward-looking statements with respect to or that may impact earnings for fiscal 2001, and thereafter, include many factors that are beyond the company’s ability to control or estimate precisely, such as estimates of future market conditions and the behavior of other market participants. Other factors include, but are not limited to, weather conditions, economic conditions in the company’s service territories, fluctuations in energy-related commodity prices, conversion activity, other marketing efforts and other uncertainties.

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