Gaz Metro acquires El Paso stake in Portland gas pipeline

MONTREAL — - MONTREAL — Exercising its right of first refusal, Gaz Metro Limited Partnership said today it will pay $21.6 million (U.S.) to increase its stake in New England's Portland Natural Gas Transmission System from 26.9 per cent to 38.3 per cent.

The 471-kilometre pipeline transports gas from Canada to Maine, New Hampshire and Massachusetts, including the Boston area.

On Oct. 20, El Paso Corp. announced it had reached an agreement to sell its entire 29.64 per cent interest in the pipeline to TransCanada Corp. for $137.2 million.

But Gaz Metro says it notified El Paso recently that it would exercise its right to match TransCanada's offer and acquire the units to which it was entitled through a partnership agreement.

TransCanada now will own 61.7 per cent of the Portland pipeline and Gaz Metro will own 38.3 per cent. If Gaz Metro hadn't intervened, TransCanada's interest would have risen to more than 73 per cent from 43.4 per cent.

"We are pleased to be able to seize this opportunity to increase our ownership interest in a major natural gas transportation infrastructure in the New England market," Gaz Metro CEO Robert Tessier said in a release.

The pipeline transports, among others, gas from TransQuebec & Maritimes' system, which is owned 50-50 by Gaz Metro and TransCanada.

In September, both TransCanada and Gaz Metro increased their stakes in the Portland pipeline by acquiring DTE East Coast Pipeline Co.'s interest.

Through its operating companies, TransCanada has a network of 38,000 kilometres of pipeline transporting most of Western Canada's natural gas production to major markets in Canada and the United States. TransCanada also owns, controls or is building more than 4,500 megawatts of electricity.

With more than $2 billion of assets and 1,500 employees, Gaz Metro is a leading Quebec energy company and one of Canada's largest natural gas distributors.

It has about 150,000 customers in Quebec and is also active in the northeastern United States. It has an underground pipeline network of almost 10,000 kilometres.