TransCanada Sells Gas Marketing, Trading To BP
Following through on a cost-cutting initiative begun in 1999 under another CEO, Calgary-based TransCanada PipeLines Ltd. on Friday said it has reached an agreement to sell some of its natural gas marketing and trading operations to BP Gas & Power. Included in the sale is CanStates Gas Marketing, a contract to manage gas supply assets for SEMCO Energy Gas Co., and the marketing and trading operations in its Omaha, NE office. Financial details were not disclosed.
The sale, expected to close in the fourth quarter, is part of a long process first begun in 1999 by then-CEO Doug Baldwin, who told investors to expect C$3 billion of the company's C$26 billion in assets to be put on the auction block by the end of 2001 (see NGI, Nov. 1, 1999). Earlier this year, TransCanada, Canada's largest natural gas transporter, said it would exit the natural gas marketing business to focus on its core natural gas transmission and power businesses in Canada and the northern tier of the United States (see NGI, May 14).
Of the latest cuts, CEO Hal Kvisle said the company was "progressing toward a complete exit from the natural gas marketing and trading business. Our carefully managed exit from this business is one more step toward achieving our goal to be the strongest and most profitable competitor in our core businesses of natural gas transmission and electric power."
Kvisle said he was "excited about the prospects for our natural gas transmission and power business," adding he expected to see "significant growth and value creation in regions where we have strong competitive advantages." TransCanada still has several marketing assets for sale, including most of its gas transport and storage contracts, lease arrangements for marketing offices in Toronto and Montreal, and a business that markets aggregated supply from more than 500 Canadian gas producers.
TransCanada's network of 38,000 kilometers of pipeline transports most of western Canada's natural gas production to Canada and the United States. It owns, controls or is developing approximately 1,900 MW of power generation.
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