By OGJ editors
HOUSTON, Dec. 22 -- TransCanada Corp. plans to acquire ANR Pipeline Co. and ANR Storage Co. and an additional 3.55% interest in Great Lakes Gas Transmission Ltd. Partnership from El Paso Corp.
The total purchase price is $3.4 billion, subject to closing adjustments, and includes $457 million of assumed debt. The sales are part of El Paso's efforts to reduce debt.
TransCanada Chief Executive Officer Hal Kvisle said, "With the acquisition of ANR, TransCanada's wholly owned natural gas pipeline network will extend more than 59,000 km and offer our customers unparalleled connections."
ANR operates 17,000 km (10,500 miles) of pipeline with a peak-day capacity of 6.8 bcfd. It transports natural gas from fields in Louisiana, Oklahoma, Texas, and the Gulf of Mexico to Wisconsin, Michigan, Illinois, Ohio, and Indiana.
It also owns and operates underground gas storage facilities in Michigan with a total capacity of 230 bcf.
After closing, TransCanada will have interests in 360 bcf of storage capacity. Pending regulatory approvals, the acquisition is expected to close in the first quarter of 2007.
Great Lakes owns and operates a 3,400 km (2,115 mile) interstate gas pipeline system with a design capacity of 2.5 bcfd.
With the acquisition of an additional 3.55% interest in Great Lakes, TransCanada will directly own 53.55% of Great Lakes and will become the operator. Great Lakes now is operated by a company jointly owned by affiliates of El Paso and TransCanada.
In a separate transaction, TC PipeLines LP will acquire 46.45% of Great Lakes from El Paso for $962 million, subject to closing adjustments, including $212 million of assumed debt. TransCanada is the General Partner and a common unit holder (13.4% interest) of TC Pipelines LP.