CHARLOTTE, N.C. and VANCOUVER, B.C., March 8, 2002 — Duke Energy announced it has received approval from Industry Canada for its acquisition of Westcoast Energy.
“We are pleased to reach agreement with Industry Canada to meet the provisions of the Investment Canada Act in a timely and mutually beneficial way,” said Robert Evans, president and chief executive officer of Duke Energy Gas Transmission.
“This constitutes one of the last and most important steps in the acquisition process. The acquisition will allow us to move forward in developing major North American natural gas infrastructure. It represents a major commitment by Duke Energy to grow its businesses in Canada and throughout North America. We are pleased that Industry Canada and the Government of Canada have moved expeditiously through the rigorous process of dealing with a major transaction such as this.”
The acquisition, announced on Sept. 20, 2001, is a cash, stock and debt assumed transaction valued at approximately US$8 billion. It was recommended by the Westcoast board of directors and endorsed by 96 percent of Westcoast shareholders at a special meeting on Dec. 13, 2001.
Duke Energy is able to provide substantial financial, managerial and technical expertise to its Canadian assets. The company said that this transaction will provide substantial benefits to Canada.
Duke Energy announced a number of commitments to the Government of Canada. Duke Energy will establish Duke Energy Gas Transmission Canada to operate Westcoast’s gas transmission and distribution assets in Canada. Major offices in Vancouver, Chatham, Calgary and Halifax will be retained with significant resident Canadian leadership in these businesses. The Halifax office will have increased responsibilities as it will become the headquarters for the U.S. as well as Canadian portions of the Maritimes & Northeast Pipeline. In addition, several Canadian executives have been named to leadership roles with the company’s gas transmission unit based in Houston as well as at Duke Energy’s corporate headquarters in Charlotte.
Duke Energy also has committed to accelerate the growth of Westcoast’s gas transmission and distribution businesses to meet producer and market demand for natural gas transmission and storage services. In particular, Duke Energy has committed in 2002 to capital expenditures of CDN$621 million and has committed to further significant capital expenditures in the following two years on projects such as the British Columbia T South pipeline expansion and the Maritimes & Northeast Pipeline Phase IV expansion. These projects in combination will deliver approximately 600,000 dekatherms per day of Canadian natural gas to the North American market beginning 2003 to 2005, generating estimated economic benefits of CDN$1.3 billion.
Michael Phelps, chairman and chief executive officer of Westcoast Energy, stated, “Westcoast Energy has a long tradition of extending meaningful support to local communities, universities and research and development initiatives. I am particularly pleased to note Duke Energy’s commitment to maintaining this tradition.” In addition to the commitments on capital expenditure, Duke Energy has committed to spend CDN$4 million to fund innovative research programs, university chairs and professorships.
Duke Energy also has committed monies to support the research and development efforts sponsored by the Canadian government under the Program for Energy Research & Development. These efforts will focus on increasing the competitiveness of Canada’s energy industry in the North American market.
“I am pleased that we have reached agreement on this process,” Evans said. “This will mean more investment in Canada, more stability and growth in the energy sector and more efficiency in our North American operations with resulting better value for consumers of energy. In addition, it means greater opportunities for Canadians and a larger contribution to the quality of life of North Americans. For almost 100 years, we have believed in doing good business – business that recognizes our commitment to the communities in which we live. This announcement confirms that.”
Westcoast Energy Inc. headquartered in Vancouver, British Columbia, is a North American energy company with assets of approximately US$10 billion. The company’s interests include natural gas gathering, processing, transmission, storage and distribution, as well as power generation, international energy businesses, and financial, information technology and energy services businesses. More information is available on the Company’s Web site at www.westcoastenergy.com.
Duke Energy, a diversified multinational energy company, creates value for customers and shareholders through an integrated network of energy assets and expertise. Duke Energy manages a dynamic portfolio of natural gas and electric supply, delivery and trading businesses — generating revenues of more than $59 billion in 2001. Duke Energy, headquartered in Charlotte, N.C., is a Fortune 100 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: www.duke-energy.com.