Integrys unit to sell wholesale gas business

Integrys' energy services unit to sell wholesale natural gas business for undisclosed sum

• On 11:19 am EDT, Thursday October 29, 2009

CHICAGO (AP) -- Utility company Integrys Energy Group Inc. said Thursday a subsidiary has agreed sell its wholesale natural gas marketing business for an undisclosed amount.

The company did not identify the buyer in the deal with its nonregulated subsidiary, Integrys Energy Services Inc.

Integrys said the sale of the wholesale natural gas marketing business, which produced 445.6 billion cubic feet of gas in 2007 and 594.9 billion cubic feet in 2008, is expected to cut collateral support requirements by $290 million. The transaction is due to close by the end of the fourth quarter.

Integrys said the deal includes storage contracts for 11.5 billion cubic feet of gas. It said it will provide services related to about 8 billion cubic feet between now and April 2011. The remaining 3.5 billion cubic feet will be divested in the normal course of business, expected to be completed in the first quarter of 2010.

That part of the transaction is expected to reduce collateral support requirements by an additional $150 million.

"These transactions are consistent with the ultimate goals of our strategy change we set forth earlier this year, namely to reduce our capital investment and collateral support requirements for Integrys Energy Services," Charles A. Schrock, Integrys Energy Group's president and CEO, said in a statement.

A spokesman for the company did not immediately respond to a message seeking further details about the transaction.

Shares of Integrys rose 18 cents to $34.46 in morning trading.

Buzz up!