Taking its initial plunge into the Canadian Midstream market, Duke Energy announced Wednesday its subsidiary, Duke Energy Services Canada Ltd., acquired gas gathering and processing assets from Calgary-based Cometra Energy. Financial terms were not disclosed.

The northwestern Alberta assets include the Fourth Creek sour gas processing plant and gathering system, which is capable of handling 69 MMcf/d of production. The purchase also includes Cometra’s 100% interest in the recently approved Pouce Coupe Plant, a 23 MMcf/d sour gas processing plant that is scheduled to be in service by the end of June. The plant will be integrated into the western end of the 100-mile Fourth Creek gas gathering system near the British Columbia provincial border. In early February, the National Energy Board (NEB) granted approval for an extension to be built from the Pouce Coupe plant into British Columbia. This transaction gives Duke Cometra’s 50% interest in the extension. The other half of the extension belongs to Star Oil & Gas Co.

“These midstream assets have access to growing regional gas supplies and are strategically located near TransCanada’s NOVA pipeline system and the planned Alliance Pipeline. This purchase represents a solid initial entry into the Canadian midstream business,” said Jim Mogg, president of Duke Energy’s Canadian and U.S. midstream business units.

Duke spokesman John Barnett said the move adds to Duke’s already powerful diversity. “I would say this acquisition is a cornerstone for Duke Energy Canada. I would be hesitant to say that it points the company in a new direction because Duke has so many different units operating individually. But, for sure, this marks a new option.”

The move comes one day after Duke Energy Field Services Inc. gained a big boost in the attempt to close it’s November deal with Union Pacific Resources (See Daily GPI, Nov. 24). The Federal Trade Commission approved the deal on Tuesday, after the mandatory Hart-Scott-Rodino Act waiting period of 30 days expired. Duke said it expects the $1.35 billion transaction to close by March 31. Duke officials view western Canada as a natural extension of its North American midstream business.

Cometra officials said they hope this marks the beginning of a profitable relationship between the two companies. Cometra Energy (Canada) Ltd. is a wholly owned subsidiary of Electrafina S.A. of Brussels, Belgium. The assets were previously operated by their wholly-owned subsidiary Canrock Pipeline. Cometra has been in business in Western Canada for 10 years.

A Duke official said this announcement is the final step of the transaction and all regulatory issues have been settled.

©Copyright 1999 Intelligence Press Inc. All rights reserved.The preceding news report may not be republished or redistributed, in wholeor in part, in any form, without prior written consent of Intelligence Press,Inc.