TransCanada, Enterprise Products and Quicksilver Gas Services Sign Agreement for Equity and Pipeline Capacity in Pathfinder Pipeline Project
CALGARY, ALBERTA AND HOUSTON, TEXAS AND FORT WORTH, TEXAS--(Marketwire - May 12, 2008) - TransCanada Corporation (TSX:TRP) (NYSE:TRP), affiliates of Enterprise Products Partners L.P. (NYSE:EPD) and Quicksilver Gas Services LP (NYSE Arca: KGS) today announced they have signed a Memorandum of Understanding ("MOU") regarding the proposed Pathfinder Pipeline project. Pursuant to the MOU, Enterprise and Quicksilver Gas Services would acquire up to an aggregate 50 percent ownership in the proposed Pathfinder Pipeline project and commit to ship a total of 500 million cubic feet per day (MMcf/d) for a 10-year term, on the Pathfinder Pipeline, subject to the execution of definitive agreements.
Enterprise and Quicksilver Gas Services would own up to 40 percent and 10 percent, respectively, of the Pathfinder Pipeline. Enterprise and Quicksilver Gas Services anticipate forming a new entity which will contract for the 500 MMcf/d shipping position. Enterprise will own 80 percent of this new entity and Quicksilver Gas Services will own the remaining 20 percent. Upon execution of Enterprise's and Quicksilver Gas Services' option to acquire ownership, TransCanada's ownership in Pathfinder would be reduced from 100 percent. TransCanada will continue to be responsible for developing, constructing and operating Pathfinder.
The Pathfinder Pipeline project is designed to provide initial service from Meeker, Colorado to the Northern Border Pipeline Company system. A subsequent expansion would extend service from Northern Border to both the Great Lakes Gas Transmission System and TransCanada's Canadian Mainline pipeline system at Emerson, Manitoba. The initial capacity of the pipeline will be 1.2 billion cubic feet per day.
"TransCanada is very pleased to be working with Enterprise and Quicksilver Gas Services on the Pathfinder Pipeline Project," says Hal Kvisle, president and chief executive officer of TransCanada. "Their commitment to the project is a significant milestone toward obtaining the necessary support for the project and demonstrates that Pathfinder is a cost competitive solution to moving an increasing supply of natural gas from the Rocky Mountains to growing U.S. Midwest and Eastern markets using existing assets." Mi
chael A. Creel, president and chief executive officer of Enterprise said, "We are very excited about the Pathfinder project, which will complement our integrated energy value chain, and provide valuable take-away capacity for ongoing expansion efforts at our Meeker natural gas processing plant."
"The Pathfinder project is an innovative solution to match natural gas supply from the Rockies with demand from U.S. markets in a cost-effective manner that benefits consumers, producers and our unitholders," said Toby Darden, Quicksilver Gas Services president and chief executive officer. "We are very pleased to become a part of this important project."
The first phase of the proposed 915-mile (1,465-kilometre) Pathfinder Pipeline project, which would transport natural gas north from Meeker, Colorado through Wamsutter, Wyoming to Northern Border, has an anticipated in-service date of late 2010. The second phase extending the pipeline to Emerson, where gas can be shipped to Eastern markets or storage facilities using the Great Lakes Gas Transmission system and TransCanada's Canadian Mainline system could be in service as early as the fourth quarter of 2011.
With more than 50 years' experience, TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas pipelines, power generation, gas storage facilities, and projects related to oil pipelines and LNG facilities. TransCanada's network of wholly owned pipelines extends more than 59,000 kilometres (36,500 miles), tapping into virtually all major gas supply basins in North America. TransCanada is one of the continent's largest providers of gas storage and related services with approximately 355 billion cubic feet of storage capacity. A growing independent power producer, TransCanada owns, or has interests in, approximately 7,700 megawatts of power generation in Canada and the United States. TransCanada's common shares trade on the Toronto and New York stock exchanges under the symbol TRP.
Enterprise Products Partners L.P. is one of the largest publicly traded partnerships with an enterprise value of more than $21 billion, and is a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil and petrochemicals. Enterprise transports natural gas, NGLs, crude oil and petrochemicals through more than 35,000 miles of onshore and offshore pipelines. Services include natural gas transportation, gathering, processing and storage; NGL fractionation (or separation), transportation, storage, and import and export terminaling; crude oil transportation and offshore production platform services. Additional information is available at the partnership's web site (www.epplp.com). Enterprise Products Partners L.P. is managed by its general partner, Enterprise Products GP LLC, which is wholly owned by Enterprise GP Holdings L.P. (NYSE:EPE). For more information on Enterprise GP Holdings L.P., visit www.enterprisegp.com.
Quicksilver Gas Services LP is a midstream master limited partnership engaged in the business of gathering, processing and transporting natural gas. Principle operations are focused on the Barnett Shale formation in the Fort Worth Basin in north Texas. Headquartered in Fort Worth, the company's predecessors began operations in 2004 to provide midstream services primarily to Quicksilver Resources Inc. (NYSE:KWK), the owner of our general partner. For more information about Quicksilver Gas Services, visit www.kgslp.com.
This news release may contain certain information that is forward looking and is subject to important risks and uncertainties. The words "anticipate", "expect", "may", "should", "estimate", "project", "outlook", "forecast" or other similar words are used to identify such forward looking information. All forward-looking statements reflect beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. Factors which could cause actual results or events to differ materially from current expectations include, among other things, the ability of TransCanada, Enterprise or Quicksilver to successfully implement their strategic initiatives and whether such strategic initiatives will yield the expected benefits, the availability and price of energy commodities, regulatory processes and decisions, changes in environmental and other laws and regulations, competitive factors in the pipeline and energy industry sectors, construction and completion of capital projects, labour, equipment and material costs, access to capital markets, interest and currency exchange rates, technological developments and the current economic conditions in North America. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause actual results and experience to differ materially from the anticipated results or expectations, expressed. Additional information on these and other factors is available in the reports filed by TransCanada, Enterprise and Quicksilver with Canadian securities regulators and/or with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this news release or otherwise, and to not use future-oriented information or financial outlooks for anything other than their intended purpose. Neither TransCanada, Enterprise nor Quicksilver undertake any obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
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