Duke Energy said it is selling its 50% stake in Foothills Pipe Lines to TransCanada PipeLines for $177 million (C$257 million), including $105 million (C$152 million) in Foothills debt. Duke obtained the Foothills interest when it purchased Westcoast Energy in 2002 (see Daily GPI, Sept. 21, 2001; Feb. 28, 2002).

“The sale of our interest in Foothills Pipe Lines Ltd. is consistent with our overall North American portfolio management strategy,” said Duke CEO Richard B. Priory. “This transaction, along with our previously announced asset sales this year, will put us closer to our goal of approximately $1.5 billion in gross proceeds from asset sales for 2003.”

Foothills’ current pipeline system extends more 647 miles across Alberta, British Columbia, and Saskatchewan. It has been in operation since the early 1980s, and its current capacity is 3.3 Bcf/d. It carries about 30% of all Canadian natural gas exports to the United States.

Nevertheless, Tom O’Connor, president of Duke Energy Gas Transmission, said Duke’s “North American pipeline presence remains very strong.” He said despite the Foothills sale, the company remains fully focused on Canada and the further development of its gas assets in British Columbia, Ontario and Atlantic Canada. Duke also owns the former Westcoast system in British Columbia, the Union Gas system in Ontario and majority portion of the Maritimes & Northeast Pipeline. The company’s other recent pipeline sales have included the Empire State Pipeline, a share in Northern Border Partners, and a 23% stake in Alliance Pipeline.

The deal, which is expected to close in third quarter 2003, will give TransCanada 100% ownership of Foothills, which holds the certificates for the proposed Alaska Highway pipeline project. The Alaska project, which would stretch from Prudhoe Bay in Alaska down the Alaska Highway through Canada and into the United States, has grown significantly in importance as natural gas prices have skyrocketed over the past few years. TransCanada said the Foothills assets also fit well with its massive western Canadian transmission network.

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