TransCanada Picks Up 5 Westcoast Cogeneration Plants
Calgary's TransCanada Power LP, a unit of TransCanada Pipelines Ltd.,
last week said it was buying Westcoast Energy Inc.'s interest in five Canadian
cogeneration plants in a deal valued at C$512 million. Westcoast, based
in Vancouver, is expected to net C$75 million after taxes, and turn its
attention toward its new power generation projects.
The facilities to be sold include a 100% interest in the 250 MW Island
cogeneration plant near Campbell River, BC, expected to begin operations
later this year; a 100% interest in the 110 MW Fort Frances cogeneration
plant in Fort Frances, ON; a 50% interest in the 100 MW Lake Superior cogeneration
plant in Sault Ste. Marie, ONT; a 50% interest in the 117 MW McMahon cogeneration
plant in Taylor, BC; and a 50% interest in the 50 MW Whitby cogeneration
plant in Whitby, ON. Following regulatory approvals, the deal is expected
close by the end of the year, according to officials.
With the sale, Westcoast CEO Michael Phelps said his company would use
the profits as part of its capital reinvestment program. Currently, the
company is nearing the final stages of its construction of the 285 MW Bayside
power plant near Saint John, NB, in which it owns 75% interest.
Westcoast, which earned its reputation with its British Columbia gas
pipeline system, also has begun preconstruction activities on a 350 MW
Frederickson power plant to be located in the State of Washington. That
facility, of which Westcoast will own 60%, is slated to begin operations
in 2002. Westcoast also recently acquired power purchase agreements worth
296 MW in the Alberta Power Pool auction through Engage Energy.
"The development of natural gas fired power generation projects
continues to be an integral part of our growth and value creation strategy,"
said Phelps. He said the company hopes to improve its "traditional
value" by taking advantage of the merchant power opportunities found
throughout North America.
TransCanada lately has been boosting its electric power investments
and shedding its noncore properties. Already, TransCanada has either sold
or has agreed to sell most of its natural gas liquids extraction and gas
gathering and processing assets in western Canada, and it officially exited
its U.S. midstream business after selling its properties to Coastal Corp.
last year (see NGI, Nov. 29, 1999).
Carolyn Davis, Houston
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