NEW YORK, Sept 20 (Reuters) - Duke Energy Corp., the third-largest U.S. electric utility, agreed to acquire Canada's Westcoast Energy Inc. for $3.5 billion on Thursday, expanding its natural gas pipeline network serving North America's hungry power plants.
The acquisition -- which includes gas gathering, processing, transmission and storage businesses -- should close by the first quarter of 2002. It will immediately add to Charlotte, North Carolina-based Duke's earnings.
``We see the tremendous need to expand the natural gas infrastructure across North America. This combination will position ourselves to take a lead role to develop that infrastructure,'' said Richard Priory, the chairman and chief executive of Duke Energy said in a conference call after the deal was announced.
Following the deal, Duke will own about 18,900 miles of transmission pipeline, 241 billion cubic feet of natural gas storage, and 58,700 miles of gathering pipeline -- helping it supply fuel to its current power plants and ones planned for the coming years.
Natural gas prices rose as high as $10 per thousand cubic feet late last year, and while they have recently dropped to around $2.10 per thousand cubic feet, analysts expect demand for the relatively clean burning fuel to rise sharply in the next decade as new power plants are built. Indeed, Priory said he expects natural gas demand to rise by more than a third from current consumption over the next decade.
The combination of Duke and Westcoast will also own 84 processing facilities and 16,500 miles of distribution pipeline. |
