Duke Energy in conjunction with affiliates of Westcoast EnergyInc., Mobil Corporation and NS Power Holdings Inc. recentlycompleted the project financing for the U.S. and Canadian portionsof the Maritimes & Northeast Pipeline project.

“The innovative non-recourse financing package has been put inplace with a combination of bank loans and bond offerings in theUnited States and Canada,” said David Hauser, senior vice presidentand treasurer of Duke Energy. “Duke Energy will continue to look atother innovative financing structures for upcoming projects.”

Total debt financing was about $521 million in the United Statesand about C$712 million in Canada. The package includes agreementsto repay the bank loans within the first 10 years while the bondswill be repaid in years 11 through 20 of pipeline operations.

Proceeds will be used by the U.S. company and the Canadiancompany building the U.S. and the Canadian portions of theMaritimes & Northeast Pipeline for the construction, financingand operation of their respective portions of the pipeline.

The bonds were rated A1 by Moody’s Investors Service and A byStandard & Poor’s.

Maritimes & Northeast is a 658-mile pipeline traversingareas of Nova Scotia, New Brunswick, Maine and New Hampshire beforeinterconnecting with the North American pipeline grid inMassachusetts. The pipeline will transport gas from the SableOffshore Energy Project on the Scotian Shelf, which has beenestimated to have reserves of about 3.7 Tcf. The National EnergyBoard of Canada estimates total resources of about 18 Tcf on theScotian Shelf. The two Maritimes & Northeast companies that arebuilding the Canadian and U.S. portions of the pipelines are eachowned by affiliates of Duke Energy (37.5%), Westcoast Energy Inc.(37.5%), Mobil Corp. (12.5%) and NS Power Holdings Inc. (12.5%).

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