TCPL Asset Sales Reach $3 Billion
TransCanada Pipelines continued its asset divestiture program last week
with the sale of its 50% interest of the Express System crude oil pipeline
to AEC and its 10% interest in the Chilean natural gas distributor Metrogas
through a $70 million agreement with the existing Metrogas shareholders.
Alberta Energy Company (AEC) ended up paying $60 million for Express.
Included in the sale is TransCanada's 50% interest in Marquest marketing
entities which act as shippers on the system. The total purchase price
of the pipelines is expected to be $90 million, but TCPL is making a $30
million contribution to Marquest. AEC will also assume about $295 million
in project debt. Upon the expected close of the acquisition in early November,
AEC, already a 50% interest holder, will own the entire Express System.
The system consists of 1,700 miles of crude oil pipeline, connecting Canadian
and United States producers to refineries located in the U.S. Rocky Mountains
and the Midwest. The system has a capacity of 172,000 b/d.
"With the sale of Express, we have sold, or have agreements to
sell approximately $3 billion in assets from our divestiture program,"
said TransCanada spokesman Glenn Herchak, "The remaining assets under
the program we anticipate will be sold by the end of this year." Herchak
said the remaining properties included in the program are mostly natural
gas pipeline assets in Latin America.
CEO Doug Baldwin's $3 billion divestiture program was designed to put
TransCanada's financial house in order partly in preparation for upcoming
decontracting on the company's mainline due to the Alliance Pipeline coming
on line this month (see NGI, Dec. 13, 1999).
In related news last week, TCPL announced the latest in a series of
open seasons for firm capacity along various stretches of its Canadian
Mainline. Bids will be accepted from Oct. 5 to Oct. 12. Earlier this year,
the company predicted that uncontracted capacity would rise to 24% or 1.7
Bcf/d until the production market can catch up with excess pipe to the
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