Financing for Maritimes & Northeast in Place
Duke Energy in conjunction with affiliates of Westcoast Energy
Inc., Mobil Corporation and NS Power Holdings Inc. recently
completed the project financing for the U.S. and Canadian portions
of the Maritimes & Northeast Pipeline project.
"The innovative non-recourse financing package has been put in
place with a combination of bank loans and bond offerings in the
United States and Canada," said David Hauser, senior vice president
and treasurer of Duke Energy. "Duke Energy will continue to look at
other innovative financing structures for upcoming projects."
Total debt financing was about $521 million in the United States
and about C$712 million in Canada. The package includes agreements
to repay the bank loans within the first 10 years while the bonds
will be repaid in years 11 through 20 of pipeline operations.
Proceeds will be used by the U.S. company and the Canadian
company building the U.S. and the Canadian portions of the
Maritimes & Northeast Pipeline for the construction, financing
and operation of their respective portions of the pipeline.
The bonds were rated A1 by Moody's Investors Service and A by
Standard & Poor's.
Maritimes & Northeast is a 658-mile pipeline traversing
areas of Nova Scotia, New Brunswick, Maine and New Hampshire before
interconnecting with the North American pipeline grid in
Massachusetts. The pipeline will transport gas from the Sable
Offshore Energy Project on the Scotian Shelf, which has been
estimated to have reserves of about 3.7 Tcf. The National Energy
Board of Canada estimates total resources of about 18 Tcf on the
Scotian Shelf. The two Maritimes & Northeast companies that are
building the Canadian and U.S. portions of the pipelines are each
owned by affiliates of Duke Energy (37.5%), Westcoast Energy Inc.
(37.5%), Mobil Corp. (12.5%) and NS Power Holdings Inc. (12.5%).
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