TransCanada to Hold Majority Stake in PNGTS with El Paso Acquisition
By the end of the fourth quarter, Calgary-based TransCanada Corp. could own nearly three-quarters of New England's Portland Natural Gas Transmission System (PNGTS), if its agreement to buy El Paso Corp.'s 29.64% stake passes muster with the other system's partner, Gaz Metropolitain and Co. Ltd. Partnership.
TransCanada last week offered El Paso $137.2 million for its stake in the system, including El Paso's debt of $80.7 million. If TransCanada's offer is approved, the transaction is expected to close in the fourth quarter.
Just last month TransCanada acquired DTE East Coast Pipeline Co.'s 10.13% stake in PNGTS for $47.1 million, including $27.8 million of debt (see NGI, Sept. 29). The DTE purchase increased TransCanada's interest to 43.42%.
Gas Metropolitain still owns 26.94% of the system, and it controls the right of first offer. Under terms of the PNGTS partnership agreement, Gaz Metropolitain has the right to acquire its pro rata share of El Paso's offered interest for a period of 30 days after receiving notice that the partner wants to sell. If Gaz Metropolitain exercised its first offer rights, TransCanada's stake still would increase, but to 61.71%, the company said. The purchase price paid by TransCanada also would be reduced proportionately.
PNGTS's 293-mile, 220 MMcf/d interstate natural gas pipeline connects with the Trans Quebec & Maritimes Pipeline near Pittsburgh, NH. The system delivers natural gas throughout New England, including markets in Maine, New Hampshire and Massachusetts, including the Boston area.
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