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Aux Sable Buying Bakken-Focused Liquids Assets

Aux Sable Liquid Products LP unit Sable NGL LLC is buying the Stanley Condensate Recovery Plant and Prairie Rose Pipeline from a unit of EOG Resources Inc., the company said Friday.

"This acquisition represents a significant step forward in the pursuit of our strategic growth objectives in the Bakken area as it provides key infrastructure assets that will lead to increased deliveries of liquids-rich natural gas to our Channahon facilities," said Aux Sable CEO W.J. (Bill) McAdam.

The Prairie Rose Pipeline connects the Stanley Plant to the Alliance Pipeline, which delivers high energy dense phase gas to Aux Sable's Channahon, IL, plant for processing. The purchase agreement calls for the US$185 million transaction to close in July.

The Stanley Plant began operation in February 2010 and will have capacity of 80 MMcf/d when an ongoing expansion is completed this month. The plant removes the heavier hydrocarbon compounds while leaving the majority of natural gas liquids (NGL) in rich gas delivered into the Prairie Rose Pipeline.

The 12-inch diameter, 83-mile Prairie Rose Pipeline also began operation in February 2010 and gathers gas from the Stanley Plant and other sources for delivery into the Alliance Pipeline system at Bantry, ND. The pipeline has an estimated capacity of 110 MMcf/d and can be expanded to meet additional demand.

Aux Sable and Sable NGL are owned by Enbridge Inc. (42.7%), Veresen Inc. (42.7%) and Williams Partners (14.6% equity interest). Enbridge Inc. and Veresen Inc. each own a 50% interest in the Alliance Pipeline.

Enbridge's Al Monaco, gas pipelines president, said the assets increase accessibility of Alliance to Bakken-area producers and draw additional liquids-rich gas to the Aux Sable NGL fractionation plant near Chicago. "The investment complements Enbridge's existing Bakken liquids pipeline systems in North Dakota and Saskatchewan," he said.

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