Two months after it first announced it had entered into a definitive agreement to purchase Midwestern Gas Transmission from El Paso Corp., Northern Border Partners LP (NBP) reported last week that it completed the estimated $100 million deal on April 30 after receiving approval from the Federal Trade Commission (FTC).

First announced in mid-March (see NGI, March 19), NBP believes the assets will become strategically important as an outlet for western Canadian gas and eventually Alaskan gas, as well as a key supplier for generation plants in the Midwest.

“We look forward to working with the customers of Midwestern. The Midwestern and Northern Border Pipeline systems are very complementary,” said Bill Cordes, CEO of Northern Border Partners. “We believe we can create value for customers on both systems by providing better access to new supplies and markets.”

The Midwestern system is comprised of a 350-mile gas pipeline extending from Portland, TN, to Joliet, IL. It provides interconnections to seven major pipeline systems in the Chicago market area, including the Northern Border Pipeline.

The Midwestern pipeline, which operates bi-directionally, has a forward-haul capacity (northward to Chicago) of 650 MMcf/d, and a backhaul capacity in the range of 350-650 MMcf/d. Midwestern’s primary market is the growing Joliet hub near Chicago, and its secondary markets are in Kentucky, southern Illinois and Indiana.

In an analyst’s conference call with company in March, NBP said it expects current contracts will be renewed and believes the pipe will remain substantially full, at or above the 600 MMcf level. The company said the Midwestern acquisition marks the company’s fourth acquisition in just over 18 months.

Northern Plains Natural Gas Co., a general partner in NBP, will operate the Midwestern system, Cordes said. He noted that 21 experienced field employees will be transferred to Northern Plains as part of the deal. The general office functions of Midwestern will be absorbed into the Omaha, NE, headquarters of Northern Border.

El Paso’s divestiture of the Midwestern Gas Transmission pipeline assets was required by the FTC as a condition of the company’s merger with The Coastal Corp., which closed in February.

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