May 4, 2000
it has reached agreement with TransCanada PipeLines Limited to
purchase TransCanada's interest in the Oleoducto Central S.A.
(OCENSA) crude oil pipeline in Colombia. The purchase, assuming
it is completed as proposed, would double the ownership and
operating interests Enbridge already has.
Enbridge has agreed to purchase TransCanada's 17.5% equity
interest in OCENSA, as well as TransCanada's 50% equity interest
in CIT Colombia S.A. (CITCOL), the company established to provide
operating services to OCENSA. Purchase price for the OCENSA and
CITCOL shares is US$107.5 million, plus the payment to TransCanada
of dividends and operating fees earned through to June 30, 2000.
The transaction, which has been approved by the Boards of
Directors of Enbridge and TransCanada, is subject to regulatory
approvals and the rights of first refusal of other OCENSA owners.
Enbridge and TransCanada hope to close the transaction as soon as
possible, but there is a process in place that could take as long
as 90 days to complete unless a waiver can be obtained from the
other owners.
The acquisition of TransCanada's 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. In
addition to having held a 17.5% interest in OCENSA since the
project began in 1994, Enbridge is working to close the
acquisition of a 45% interest in the Jose crude oil storage and
ship loading terminal in Venezuela.
"Enbridge was instrumental in the successful construction,
start-up and ongoing operation of the OCENSA pipeline," said
Enbridge President & Chief Executive Officer Brian F. MacNeill.
"The increase in percentage ownership of OCENSA and full ownership
of CITCOL represent an expansion of an existing profitable
international activity for Enbridge, utilizing our core expertise
as well as involving partners who we have successfully worked with
for a number of years."
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, representing approximately 60% of total
Colombian oil production.
Enbridge has been a joint operator of the pipeline since its
start-up in 1997. Upon completion of the purchase of
TransCanada's interest, Enbridge will be the sole operator of the
pipeline and could have, subject to other third party rights, up
to a 35% equity interest in 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. Other OCENSA owners are Empresa
Colombiana De Petroleos (Ecopetrol), the Colombian state oil
company (25%), BP Colombia Pipelines Limited (15.2 %), TOTAL
Pipeline Colombia S.A. (15.2%), and Triton Pipeline Colombia, Inc.
(9.6%).
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