TotalFinaElf to buy TransCanada South American assets

TotalFinaElf SA has signed an agreement to acquire TransCanada PipeLines Ltd.'s interests in a number of gas transmission networks in Argentina, Chile, and Brazil for $440 million (US). The networks form an interconnected system supplying the markets of the three countries from Argentina's gas producing Neuquen and Northwest basins.

May 31st, 2000


PARIS� TotalFinaElf SA has signed an agreement to acquire TransCanada PipeLines Ltd.'s interests in a number of gas transmission networks in Argentina, Chile, and Brazil for $440 million (US). The networks form an interconnected system supplying the markets of the three countries from Argentina's gas producing Neuquen and Northwest basins.

The transaction is scheduled for completion in fourth quarter 2000, subject to approval from government authorities, regulators, and partners.

Under the agreement, TotalFinaElf will acquire:

� A 27.2% interest in Gasinvest, which owns a 70% stake in Transportadora de Gas del Norte (TGN), one of Argentina's two major natural gas transmission systems. Covering the northern half of the country, the 5,500-km pipeline has 50 million cu m/day of transportation capacity.

� A 46.5% stake in Gasoducto GasAndes Argentina SA and Gasoducto GasAndes SA, owners of the GasAndes pipeline, which interconnects with TGN and supplies the Santiago de Chile region. TotalFinaElf already owns 10% of this 465-km pipeline. There are plans in place to increase its capacity to 19 million cu m/day from 9 million cu m/day.

� A 21.8% interest in Transportadora de Gas del Mercosur SA (TGM) which owns a 437-km pipeline linking the TGN network to the Brazilian border. Start-up of the system, with a capacity that could reach 15 million cu m/day, is expected next month.

� A 12% stake in Transportadora Sul Brasileira de Gas SA, which will link with TGM and extend from the Argentina-Brazil border to the city of Porto Alegro, Brazil, over a distance of 615 km and with a planned capacity to Porto Alegre of 12 million cu m/day. TotalFinaElf already holds a 15% stake in this pipeline. A first 50-km leg will come on stream next month.

The acquisition agreement is in line with TFE's strategy of developing its downstream gas business in a region where it is already a major gas producer. The gas transmission systems involved are in the fast-growing markets of South America's Southern Cone and are expected to supply future gas-fired power plants.

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