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Oneok Acquires Remaining Stake in Northern Border

In a series of transactions, Oneok Inc. entered into a $40 million deal with TransCanada Corp. to buy the remaining general partner interest in Northern Border Partners LP. Oneok transferred its natural gas liquids, processing, storage and pipelines businesses to Northern Border Partners in February for $3 billion and partnership units.

Following Oneok's transaction, Northern Border Partners then sold a 20% interest in Northern Border Pipeline Co. (NBPC) for $300 million to TC PipeLines LP, a publicly traded partnership affiliated with TransCanada. As a result, Northern Border Partners and TC PipeLines will own a 50% joint interest in the pipeline, with an affiliate of TransCanada becoming operator of the pipeline in April 2007. Oneok now holds a 45.7% interest in Northern Border.

With capacity of 2.4 Bcf/d, the 1,249-mile NBPC is the largest natural gas pipeline connecting the Alberta hub with growing U.S. markets, transporting natural gas from the Montana-Saskatchewan border, where it connects to TransCanada's Foothills System, to interconnecting pipelines in the upper Midwestern United States.

"With the completion of these transactions, Oneok and the partnership are well positioned to grow," said CEO David Kyle, who also will serve as chairman and CEO of Northern Border. "Oneok will benefit from the expected growth of the partnership, both by acquisition and from internally generated projects. We firmly believe that our interests are clearly aligned with the limited partners and are very excited about the future."

In connection with the transactions, Oneok announced John W. Gibson, president of Oneok Energy Cos., will become president and COO of the partnership. William Cordes, CEO of the partnership, will become president of Northern Border.

Oneok intends to use $40 million of the $1.35 billion cash proceeds from the transactions to acquire the general partnership interest from TransCanada, with the remainder being used to reduce short-term debt, acquire other assets or repurchase Oneok common stock.

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