TC PipeLines LP has closed its previously announced acquisition of Sierra Pacific Resources' 50% interest in Tuscarora Gas Transmission Co. for US$100 million (see Daily GPI, Nov. 3).
TC PipeLines has also indirectly assumed US$37 million of Tuscarora debt. TC PipeLines now owns or controls 99% of Tuscarora. TransCanada Corp., the parent company of TC PipeLines' general partner, TC PipeLines GP Inc., indirectly holds a 1% ownership interest.
"Tuscarora is a high quality asset with a strong long-term contract profile, rate stability and a history of steady organic growth," said TC PipeLines GP CEO Russ Girling. "These attributes, combined with the partnership's existing ownership of Tuscarora and the pipeline's physical connection to TransCanada's system, make Tuscarora an excellent investment for TC PipeLines LP, and our unit holders."
The partnership also announced the closing of a US$410 million senior credit facility. The facility has a five-year term subject to two one-year extensions.
Tuscarora owns a 240-mile, 20-inch diameter, United States interstate pipeline system with a subscribed capacity of approximately 180 MMcf/d. The Tuscarora pipeline system originates at an interconnection point with existing facilities of TransCanada's Gas Transmission Northwest System near Malin, OR, and runs southeast through northeastern California and northwestern Nevada, terminating near Wadsworth, NV.
Tuscarora has firm transportation contracts for more than 95% of its available contracted capacity. A subsidiary of Sierra Pacific Resources holds contracts representing 69% of the total available capacity, the majority of which expires on Oct. 31, 2017.
A TransCanada subsidiary will become the operator of Tuscarora, which is currently operated by an affiliate of Sierra Pacific Resources. TransCanada has provided gas control services for the Tuscarora pipeline system since late 2002.
The Tuscarora acquisition follows the partnership's acquisition in April 2006 of an additional 20% of Northern Border Pipeline Co., an interstate pipeline that transports gas from the Montana-Saskatchewan border to markets in the U.S. Midwest (see Daily GPI, April 10). Northern Border Pipeline is a leading transporter of natural gas imported from Canada into the United States.
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