ONEOK Inc. on Thursday said it entered into an agreement to purchase Northern Plains Natural Gas Co. from a joint venture of Southern Union Co. and a General Electric unit for $175 million, conditioned on that partnership’s success in completing the acquisition of Enron Corp.’s pipeline unit, CrossCountry Energy LLC, which includes Northern Plains.

Northern Plains is one of the general partners of Norther Border Partners LP, which holds ownership interests in Norther Border Pipeline Co., Midwestern Gas Transmission Co., Viking Gas Transmission Co. and Guardian Pipeline LLC. It has a 2.73% ownership interest in Northern Border Partners, a master limited partnership.

The assets include over 2,300 miles of regulated interstate gas pipelines with the capacity to move 4.3 Bcf/d of natural gas throughout the Midwest. Northern Border Partners also owns and operates gathering and processing assets in the Powder River, Wind River and Williston basins, according to Tulsa, OK-based ONEOK.

The transaction is subject to the Southern Union-General Electric joint venture, CCE Holdings, closing its acquisition of CrossCountry Energy from Enron and certain of its affiliates, which is expected to occur no later than mid-December of this year, ONEOK said. CrossCountry Energy includes Enron’s Transwestern Pipeline, its 50% ownership of Florida Gas Transmission and Northern Plains.

A bankruptcy judge approved the sale of the CrossCountry Energy assets to CCE Holdings earlier this month for an estimated $2.45 billion, including the assumption of consolidated debt. (see Daily GPI, Sept. 13).

ONEOK’s acquisition of Northern Plains will be slightly accretive to earnings and cash flow in 2005 and will be financed through available cash or short-term credit facilities, the company said.

“This transaction provides strategically located assets that complement our existing asset base. It also provides an infrastructure that will serve as a new growth vehicle for ONEOK. We have bee exploring the master limited partnership structure as a competitive alternative to tap investment capital for growth,” said Chairman David Kyle.

ONEOK is the largest gas distributor in Kansas and Oklahoma, and the third largest in Texas. It also is involved in oil and gas production, processing, gathering, storage and transmission primarily in the Midcontinent area.

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