Canadian Producers to Acquire Pan-Alberta Gas
Pool marketer Pan-Alberta Gas and a consortium of seven
producing companies have reached agreement on the terms under which
the marketing company will be offered for sale to the more than 435
Canadian producers in the pool. The announcement of the agreement
confirmed earlier reports that a Canadian coalition was expected to
win out over bids from major U.S. marketers. (See NGI, July 13)
At least 60% (by volume) of pool suppliers must agree to
participate for the sale to go through. The seven companies, led by
Paramount Resources , have 18% of current deliverability of 1.7
Bcf/d. "Producer ownership is a logical and very positive outcome
for Pan-Alberta," said Clay Riddell, president of Paramount. "I am
confident that we can close this deal and gain control of this very
important business for producers."
Ross Weaver, president of Pan-Alberta, said a new team "over
the past year and a half has added significant value for producers
and our market customers."
Financing also must be arranged and court approval must be
gained for a plan to sever the business being sold from ongoing
litigation between pool producers and Nova (now TransCanada). The
other producers in the consortium include Canadian Natural
Resources, Ranger Oil, Crestar Energy, Rio Alto Exploration,
Pacific Cassiar, and Signalta Resources.
Former owner Nova Corp. had announced its intention to sell the
marketing company last December, after negotiations over the
lawsuit had stalled and before Nova became a part of TransCanada
PipeLines in a merger effective last month. Producers are claiming
the aggregator owes them hundreds of millions of dollars for their
gas which allegedly was diverted to a Nova affiliate at
In connection with the suit filed in 1996 some producers said
the only real cure would be for Nova to sell Pan-Alberta because
the marketer's affiliation with a pipeline company posed an
inherent conflict with producers' interests.
When Pan-Alberta was put up for sale last year, a Nova executive
said "it's not the kind of business that provides the kind of
returns Nova wants. It doesn't add a lot of profitability to Nova."
(See NGI, Dec. 8, 1997)
Meanwhile, the omnibus Canadian peace pact announced in April,
which removed obstructions to the Nova-TransCanada merger and
endorsed Alliance Pipeline, also set new rules for producer
monitoring of marketing activities by aggregators. The Pan-Alberta
pool, with 5 Tcf of reserves is the second largest exporter next to
TransCanada Energy Services.
©Copyright 1998 Intelligence Press, Inc. All rights
reserved. The preceding news report may not be republished or
redistributed in whole or in part without prior written consent of
Intelligence Press, Inc.