TransCanada buys WestCoast's cogen plant interests

Continuing its pursuit of the electric power business, TransCanada Power LP, a unit of TransCanada Pipelines Ltd., Calgary, has agreed to purchase Westcoast Energy Inc.'s interests in five Canadian cogeneration plants in a deal valued at $512 million (Can.), including assumption of $278 million in debt, Westcoast reported. Westcoast said it will net $75 million after taxes and other costs, upon completion of the transaction.


Continuing its pursuit of the electric power business, TransCanada Power LP, a unit of TransCanada Pipelines Ltd., Calgary, has agreed to purchase Westcoast Energy Inc.'s interests in five Canadian cogeneration plants in a deal valued at $512 million (Can.), including assumption of $278 million in debt, Westcoast reported. Westcoast said it will net $75 million after taxes and other costs, upon completion of the transaction.

The properties include a 100% interest in the 110 Mw Fort Frances cogeneration plant at Fort Frances, Ont.; a 50% stake in the 110 Mw Lake Superior cogeneration plant at Sault Ste Marie, Ont.; a 50% interest in the 50 Mw Whitby cogeneration plant at Whitby, Ont.; a 50% interest in the 117 Mw McMahon cogeneration plant at Taylor, BC; and a 100% interest in the 250 Mw Island cogeneration plant near Campbell River, BC, which is expected to begin operation in this year's fourth quarter.

Subject to regulatory approvals, the transaction is expected to close in the fourth quarter.

Westcoast CEO Michael Phelps said the sale will permit the company to redeploy the proceeds to new power generation and other projects that are part of its ongoing capital investment program. Westcoast is in the latter stages of building the 75%-owned, 285 Mw Bayside power project near Saint John, NB. It has also acquired the site and is proceeding with detailed engineering and preconstruction activities for the 60%-owned, 250 Mw Frederickson power project in the state of Washington, which is expected to begin operations in late 2002.

In addition, through Engage Energy, Westcoast recently bought power purchase agreements worth 296 Mw in the Alberta Power Pool auction.

TransCanada has been offloading noncore properties all year, while boosting its electric power investments. The Canadian firm has sold or agreed to sell most of its NGL extraction and gas gathering and processing assets in western Canada.

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