September 7, 2000
announced that it has completed the purchase of an additional
equity interest in the Oleoducto Central S.A. (OCENSA) crude oil
pipeline in Colombia.
In May, Enbridge announced that it had agreed to purchase
TransCanada PipeLines Limited's 17.5% equity interest in OCENSA,
as well as TransCanada's 50% equity interest in CIT Colombiana
S.A. (CITCOL), the company established to provide operating
services to OCENSA. The transaction was subject to regulatory
approvals and the rights of first refusal of other OCENSA owners.
One of the owners, Empresa Colombiana De Petroleos (Ecopetrol),
the Colombian state oil company, elected, in accordance with the
terms of the OCENSA agreement, to acquire 58.82% of the total
OCENSA shares offered by TransCanada.
As a result, Enbridge, which previously held a 17.5% equity
interest in OCENSA, has acquired an additional 7.2% interest for a
total equity interest in OCENSA of 24.7%, and Ecopetrol has
acquired an additional 10.2% giving it a total equity interest of
35.3%. Enbridge has also acquired all of TransCanada's equity
interest in CITCOL, giving it complete ownership of the operating
company.
The cost to Enbridge for its additional 7.2% interest in OCENSA
and all of TransCanada's CITCOL shares was US$48.7 million, plus
interest and other adjustments of US$4.6 million for a total cost
to Enbridge of US$53.3 million. This represents Enbridge's share
of the total purchase price of $107.5 million plus adjustments.
The acquisition of the additional OCENSA interest strengthens
Enbridge's presence in Colombia and South America, and is
consistent with the Company's overall strategic focus on
developing its strong base of existing energy delivery businesses
through expansion and geographic extension within North America,
as well as through attractive international opportunities.
The increase in ownership of OCENSA and CITCOL represents an
expansion of an existing profitable international activity for
Enbridge. Enbridge has been a joint operator of the pipeline
since its start-up in 1997. It is now sole operator of the
pipeline on which it will continue to earn a fixed rate of return
on its investment, plus operating and incentive fees. In 1999,
Enbridge's earnings from OCENSA were approximately Cdn$24 million.
In addition to Enbridge and Ecopetrol, the other OCENSA owners are
BP Colombia Pipelines Limited (15.2 %), TOTAL Pipeline Colombia
S.A. (15.2%), and Triton Pipeline Colombia, Inc. (9.6%).
OCENSA is approximately 800 kilometres long and was built to
transport crude oil from the Cusiana and Cupiagua oil fields in
central Colombia to storage and loading facilities on the
Caribbean coast. The pipeline currently transports approximately
480,000 barrels per day.
Enbridge Inc. is a leader in energy transportation, distribution
and services. As a transporter of energy, Enbridge operates, in
Canada and the U.S., the world's longest crude oil and liquids
pipeline system. The company also is involved in liquids
marketing and international energy projects, and has a growing
involvement in the natural gas transmission and midstream
businesses. As a distributor of energy, Enbridge owns and
operates Canada's largest natural gas distribution company, which
provides gas in Ontario, Quebec and New York State; and is
involved in the distribution of electricity. In addition,
Enbridge provides retail energy products and services to a growing
number of Canadian and U.S. markets. The company employs
approximately 5,500 people, primarily in Canada, the U.S. and
South America. Enbridge common shares trade on the Toronto Stock
Exchange in Canada under the symbol "ENB" and on The NASDAQ
National Market in the U.S. under the symbol "ENBR". Information
about Enbridge is available on the Company's web site at