Alberta Energy Co. Ltd. wants to buy or lease another U.S.natural gas storage facility, but is remaining mum on what regionit is targeting and which companies it may be negotiating with. CEOGwyn Morgan would only say last week that his company isnegotiating to buy a storage unit for less than C$100 million, andhopes to complete the deal before year’s end.

AEC, which operates the 85 Bcf-capacity AECO-C storage hub insoutheastern Alberta, already has a deal on the table to buyTransCanada PipeLine Ltd.’s half interest in the Alberta-WyomingExpress oil line, and also to expand its Cold Lake, AB heavy oilpipeline. However, Morgan has indicated that natural gas is AEC’sstrength. It is already running gas storage facilities inCalifornia, Texas and Alberta.

Following a conference in San Francisco last week, Morgan saidAEC is “looking at both acquisitions and situations where we canmove in and, in effect, manage the assets to add value and takesome of the incremental value that we can add.”

One clue as to where the new storage facility might be may be foundin its recent acquisition of McMurray Oil (see Daily GPI, May 3). In that deal, AEC put its stake inthe Rocky Mountain region, obtaining acreage in the Jonah Field in theGreen River Basin in southwest Wyoming — situated near the Opal gashub.

In the McMurray deal, AEC netted the 245-mile Jonah Field gasgathering system, which now transports 320 MMcf/d of gas, and isconsidered ready for expansion to 440 MMcf/d.

Morgan said the McMurray deal gave AEC “a substantial new growthplatform in the U.S. Rockies, something we have been looking to dofor some time. It’s an area that we have been exploring in and ofcourse, now our exploration programs will be expanded.” Its netexploration acreage in Wyoming to about 135,000 net acres.

In the United States, AEC has the main transportation link tothe Opal hub with its purchase of a 92.5% stake in the Green RiverPipeline LLC, which owns the Jonah Gas Gathering Co. Morgan saidthe company would like to buy the other 7% of that pipeline.

Morgan said that his company is expected to generate a cash flowof about C$8 per share this year, double 1999 numbers. That wouldput earnings estimates in the C$4 a share range, which is nearlyfour times last year’s earnings.

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