By the OGJ Online Staff
HOUSTON, Mar. 9�Directors of Lakehead Pipe Line Partners LP have approved the acquisition of the North Dakota pipeline system of Enbridge Inc. for $33 million in cash.
Enbridge's directors have also approved the transaction. The deal will close May 1, subject to regulatory approval.
The North Dakota System includes 330 miles of crude oil gathering lines connected to a 620-mile trunk line. It has an operating capacity of 84,000 b/d.
It gathers crude oil from the Williston basin in North Dakota and Montana and receives Canadian crude oil via an interconnect with Enbridge's gathering system in Saskatchewan.
Lakehead said average system deliveries were 67,000 b/d in 2000.
J. Richard Bird, president of Lakehead's general partner, said, "Purchase of the North Dakota feeder system from Enbridge represents a first step in our recently adopted strategy focused on accelerating growth in cash distributions through acquisition of energy transportation assets. It is also consistent with our objective to diversify the partnership operations geographically and to other complementary businesses, including feeder systems, terminals, and natural gas assets."
Lakehead estimates the North Dakota System will have earnings of $5.5 million/year before interest, taxes, depreciation, and amortization and net income of $2.5 million/year over the next few years.