The next round of restructuring is about to unfold in Canada’snatural-gas community as a white knight buyer prepares to stepforward for the country’s second-biggest supply aggregator,Pan-Alberta Gas Ltd. In fact, a team of rescuers has emerged.Senior Canadian industry sources say a producer consortium has comeup with a winning bid that will both keep the mammoth dealer inhome-grown hands and heal the worst remaining sore spot in thecommunity.

The sources, who requested anonymity, would not reveal names inadvance of an announcement described as likely to come any time.But it is rated as well-educated guessing to bet that the buyergroup will come from within Pan-Alberta’s supply pool. Thatincludes a who’s-who of Canadian producers.

With sales topping 1.6 Bcf/d that fetched C$1.6 billion (US$1.1billion) in 1997 for 425 producers that have 5 Tcf of reserves inthe supply pool, Pan-Alberta stands out as an Canadian industryfixture. It ranks second only to TransCanada Gas Services and itssales of 5 Bcf/d on behalf of more than 700 producers dedicatingreserves of 13 Tcf, many of whom also belong to the Pan-Albertapool.

Pan-Alberta is said to have attracted strong interest frommajor, international-scale marketers based in the United Statessuch as Duke Energy. But the sale, first announced by owner NovaCorp. before its merger deal with TransCanada PipeLines Ltd. lastwinter, has been complicated by severe conflicts within thePan-Alberta family. Producers and the aggregator have been lockedin a marathon lawsuit over alleged misuse of supplies, which hasescalated into a class-action case involving every corner of thesupply pool.

The case, involving damage claims that have escalated well intothe nine-digit range, has included demands for tighter control bythe producer pool over marketing. A takeover by a producerconsortium is expected to include a resolution of the feud. Such adeal is also rated as likely to include some restructuring to makePan-Alberta more like the producer-owned co-operative that marketsoutput from British Columbia, CanWest Gas Supply.

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