Calgary, June 29, 2004 KeySpan Energy Canada Partnership (KeySpan) announced today the closing of the acquisition of the El Paso Velvet Processing Limited Partnership from wholly-owned subsidiaries of EL Paso Corporation for $7 million plus certain working capital adjustments. The El Paso Velvet Processing Limited Partnership owns the Caribou gas plant, associated gathering pipelines and related acid gas disposal infrastructure. The transaction has an effective date of January 1, 2004.
Caribou is a 40 mmcf/d sour gas plant located approximately 170 kilometers northwest of Fort St. John, British Columbia. Constructed in 1997, the plant extracts natural gas liquids and condensate in addition to sales gas. Hydrogen sulphide and carbon dioxide is injected into underground reservoirs through the plant’s acid gas injection scheme. Sales gas is delivered into the Duke Energy Fort Nelson mainline while the natural gas liquids and condensate are transported by truck to terminals in the area. Also included with the purchase are approximately 24 kilometers of large diameter gathering pipelines, a 5 kilometer sales gas pipeline and natural gas liquids terminaling facilities. The plant is currently operating at approximately 50% of capacity.
“The acquisition of Caribou will be accretive to KeySpan’s near-term cash flow and fits with our current business strategy” said Jim Bertram, KeySpan President and CEO. “We look for facilities with competitive advantages, that are strategically located adjacent to lands with prospective geology, and where we can operate to ensure control over the timing and direction of new business opportunities. This acquisition meets all of these criteria”.
“This area of northeastern British Columbia is relatively underexplored and there is significant upside potential”, Bertram noted. “We see many interesting opportunities in this region, and expect to be able to attract new gas to the Caribou plant in the near future. We are looking forward to developing long term business relationships with producers and other industry stakeholders in this new growth area”.
About KeySpan Energy Canada
KeySpan 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.
KeySpan Energy Canada is jointly owned by KeySpan Facilities Income Fund (TSX:KEY.UN; KEY.DB), holding a 75% interest, and KeySpan Corporation (NYSE:KSE), holding the remaining 25%.
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 Energy Canada or 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
