Tractebel to buy Cabot LNG for $680 million
France's Suez Lyonnaise des Eaux unit Tractebel said Thursday it has purchased Cabot Corp. subsidiary Cabot Liquefied Natural Gas, Boston, for $680 million, vaulting the company into the ranks of major players in the important New England gas and electricity market.
France's Suez Lyonnaise des Eaux unit Tractebel said Thursday it has purchased Cabot Corp. subsidiary Cabot Liquefied Natural Gas, Boston, for $680 million, vaulting the company into the ranks of major players in the important New England gas market.
Under the agreement, Tractebel, based in Belgium, will acquire Cabot's LNG terminal in Everett, Mass, Cabot's 10% interest in a liquefaction facility in Trinidad and Tobago, and Cabot's LNG tanker, Matthew. It also includes a multibillion-dollar gas sales and purchase agreement with Sithe Energies Inc., under which a Cabot LNG subsidiary is the principal supplier of natural gas to fuel Sithe�s Mystic station, a 1,600-Mw power plant under construction in Everett, Mass.
In the Boston gas market, Cabot is a major owner of storage capacity, a base-load gas supplier, and gas peak-shaver. Hansen said Tractebel and its affiliate, Distrigas (of Belgium), will bring extensive technical, economic, and marketing experience to the LNG market.
The acquisition represents Tractebel's initial entre into the North American upstream market and is a "wonderful addition" to the company's existing businesses, says Bill Utt, president of Tractebel Power Inc. and Tractebel Marketing Inc., Houston.
Tractebel, a global energy and services company, operates 20 US power plants in 12 states, including 9 between New Hampshire and Pennsylvania.
Tractebel CEO Jean-Pierre Hansen said the acquisition of Cabot LNG provides a 20% share of the Atlantic Basin market and will create a foothold in the physical gas markets in the Northeast, allowing Tractebel to serve the power industry in the US Northeast. Atlantic Basin LNG trade currently involves Belgium, France, Italy, Spain, Turkey, and the US.
It also provides an ideal complement to TEMI, Tractebel's North American energy trading arm, he said. TEMI is already active in the market, particularly in the Boston region.
"In the present market circumstances, this acquisition will contribute positively to Tractebel's results from the outset," Hanson said. "The integration of Cabot LNG will create synergies with existing LNG and natural gas operations within our group," stated Hansen. The transaction is expected to close in late August 2000.
Earlier this week, Cabot reported it made the first delivery of LNG to Puerto Rico�s first independent power plant and LNG receiving terminal, the EcoEl�rica facility near the city of Ponce, under a 20-year agreement (OGJ Online, July 12, 2000). The new 507 Mw natural gas-fired power plant is designed to generate as much as 20% of Puerto Rico�s electricity demand.
The complex includes the power plant, a state-of-the-art LNG import terminal with 3.6 bcf of storage, and a desalination plant.
The group has electricity generating capacity of about 46,000 Mw�either already installed or at an advanced state of development�of which 30,000 Mw is outside Belgium. One of Europe's five largest power producers, it also operates gas transport networks in Europe, Latin America, and Asia.