In its second bite this year at Canadian reserves, San Jose,CA-based independent power producer Calpine Corp. announced Mondayit will make a cash offer to acquire TriGas Exploration Inc.,Calgary, Alberta, for C$156 million. The two companies jointlyannounced they have an agreement that has the “unanimous support”of both companies’ boards.

Calpine has a proposed 250-MW natural gas-fired electricgeneration plant, Calgary Energy Centre, planned about 30 milesnorth of Calgary, the same area in which most of TriGas’ holdingsare located. It is anticipated that in excess of 30 MMcf/d ofnatural gas would be used to fuel the new merchant power plant,which is expected to begin operating in December 2002.

“The acquisition of TriGas would provide Calpine with naturalgas reserves to fuel its Calgary facility, and a 26% interest inthe East Crossfield Gas Plant, extensive pipelines and gatheringsystems and a significant undeveloped land base with excellentdevelopment potential,” said Calpine in announcing agreement to payC$3.20 per share of TriGas, a 28% premium over the company’s C$2.51closing price Friday on the Toronto Stock Exchange.

Assuming all Canadian and U.S. regulatory approvals arereceived, the deal would increase Calpine’s natural gas portfolioto the equivalent of 480 Bcf overall, with an added equivalent of152 Bcf coming from Canada. Calpine will pick up about 30 MMcf/din the TriGas properties. TriGas’ reserves are “substantially allnatural gas and associated natural gas liquids, representing asignificant strategic asset for Calpine,” the company said.

Almost all of the TriGas operations are located in theAcme/Irricana/Lonepine areas of Alberta, 30 miles north of Calgary,the same area in which Calpine’s proposed power plant is slated tobe located. In July, Calpine acquired gas reserves equivalent toabout 38 MMcf/d in Alberta when it bought Quintana Minerals CanadaCorp. (NGI, Aug. 7, 2000). The production of those supplies isexpected to increase to about 42 MMcf/d by the end of this year, aCalpine spokesperson said.

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