By the OGJ Online Staff
HOUSTON, Oct. 22, 2001 – Canada’s Westcoast Energy Inc., which is being acquired by Duke Energy Corp., for $3.5 billion, said on Monday it would sell its energy services unit and gas distribution units for a combined $384.7 million (Can.).
The city of Edmonton’s Epcor Utilities Inc. said it will purchase Union Energy and Westcoast Capital for $176.7 million (Can.). The purchase will add more than 900,000 customers, primarily in Ontario, to EPCOR’s existing customer base and will make EPCOR one of the largest national providers of energy and energy related services.
Union Energy’s primary business is the rental of water heaters. Union Energy and Westcoast Capital also provide heating, ventilation, and air conditioning products and servicing, financing and retail sales of natural gas.
Alberta-based Epcor was seen as a potential divestiture by the city of Edmonton after electricity was deregulated in the province earlier this year.
Brian Vaasjo, EPCOR’s executive vice-president and president of the energy division, said the company expected to capture 20% or more of the Ontario energy market through cross- marketing energy offers.
BC Gas Inc., Vancouver, BC, said it agreed to acquire Centra Gas British Columbia and Centra Gas Whistler from Westcoast Energy for $208 million (Can).
“We believe the acquisition of Centra Gas is a unique opportunity to expand our core business and create shareholder value,” said BC Gas CEO John Reid. “Centra Gas has excellent growth potential, including the expansion of natural gas service to residential and commercial customers and the opportunity to service gas-fired electricity generating plants on Vancouver Island.”
The deal gives BC Gas control of all Centra Gas’s Vancouver Island and Sunshine Coast assets, including 615 km of high pressure transmission mains and more than 3,000 km of intermediate pressure transmission and distribution mains. Centra Gas currently provides natural gas to 70,000 homes and businesses and seven pulp mills on Vancouver Island and the Sunshine Coast.
In addition to the acquisition of the common shares of Centra Gas, BC Gas will pay $32 million (Can.) at closing and $52 million as a deferred payment to purchase the preferred shares of Centra Gas. BC Gas will also assume Centra Gas’s debt of $298 million (Can.).
Westcoast Energy CEO Michael Phelps said the transactions provided the opportunity to realize value for assets in order to pursue growth opportunities in North American pipeline infrastructure development. The transactions are subject to provincial government and regulatory approvals.