Calgary, December 15, 2004 KeySpan Facilities Income Fund (KeySpan) announced today the closing of the acquisition of a 36% interest in the Gregg Lake - Obed sour gas pipeline from Border Midstream Services, Ltd., a subsidiary of Northern Border Partners L.P., for $17.1 million. Gregg Lake - Obed is a 129 km sour raw gas pipeline consisting of 8 inch, 10 inch and 12 inch sections originating in the Salomon area near Hinton, Alberta and running in a northeast direction, delivering raw gas to the Central Area Midstream Services (CAMS) Kaybob 3 natural gas processing plant. CAMS owns the remaining 64% and operates the pipeline. The transaction has an effective date of December 1, 2004.
“We are pleased to acquire an interest in one of the most strategic gathering systems in Alberta,” said Jim Bertram, KeySpan President and CEO. “This acquisition provides exposure to a large geologically prospective area adjacent to our existing core area of operations. The multi-zoned geology is similar to that seen to the south in the areas surrounding our Strachan, Nordegg and Brazeau River gas plants. The western capture area of the pipeline is largely undeveloped, as sour gas infrastructure in that area didn’t exist until the Gregg Lake section of the pipeline was built in 2000”.
“From a financial perspective, the acquisition will be accretive to cash flows, will require minimal maintenance capital and is expected to provide long-term cash flow stability”, Bertram added.
The Gregg Lake - Obed pipeline consists of two segments; the Gregg Lake segment running from the Salomon area to the Obed dehydration facility; and the Obed section, which runs from the dehydration facility to the CAMS Kaybob 3 plant. Cash flow is forecasted to be about $3.3 million in 2004 based on estimated 2004 throughput of approximately 125 mmscf per day.
About KeySpan Facilities Income Fund
KeySpan Facilities Income Fund (TSX:KEY.UN; KEY.DB) operates one of the largest natural gas midstream businesses in Canada. Its business consists of natural gas gathering and processing as well as the processing, transportation, storage and marketing of natural gas liquids (NGLs). KeySpan's gas processing plants and associated facilities are strategically located in the west central and foothills natural gas production areas of the Western Canadian Sedimentary Basin. Its NGL infrastructure includes pipelines, terminals and processing and storage facilities in Edmonton and Fort Saskatchewan, Alberta, a major North American NGL hub. KeySpan markets propane, butane and condensate to customers in Canada and the United States.
This press release contains certain forward-looking statements that involve significant known and unknown risks, uncertainties and other factors that could cause actual results, performance, achievements or industry results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.
For further information about KeySpan Facilities Income Fund, please visit our website at www.keyspancanada.com or contact:
David G. Smith, Senior Vice President and Chief Financial Officer, E-mail: David_Smith@keyspancanada.com Telephone (403) 205-7604 Toll Free: (888) 699-4853 Facsimile: (403) 205-8303
John Cobb, Director, Investor Relations, E-mail: John_Cobb@keyspancanada.com Telephone (403) 205-7670 Toll Free: (888) 699-4853 Facsimile: (403) 205-8303
