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Inter Pipeline Fund Completes Acquisition of Corridor Oil Sands Pipeline System
CALGARY, ALBERTA, June 15, 2007: Inter Pipeline Fund (Inter Pipeline) (TSX: IPL.UN) announced today that it has completed the acquisition of Corridor Pipeline System ("Corridor") from an affiliate of Kinder Morgan Inc. Corridor is the sole transporter of diluted bitumen produced by the Athabasca Oil Sands Project, a major Alberta based oil sands mining and upgrading project. The transaction involved the purchase of all outstanding share capital of Terasen Pipelines (Corridor) Inc. for consideration of Cdn $760 million before closing adjustments. Funding for the acquisition was provided from Inter Pipeline's existing bank credit facilities and the assumption of approximately $460 million of existing debt held within Terasen Pipelines (Corridor) Inc.
Inter Pipeline has also assumed responsibility for the completion of an estimated $1.8 billion expansion of Corridor. This project, currently in construction, will increase diluted bitumen capacity on the Corridor system from 300,000 barrels per day to approximately 465,000 barrels per day by 2010. At closing, Inter Pipeline assumed approximately $300 million in additional debt associated with construction in progress.
“Oil sands transportation is an exciting area of growth for Inter Pipeline”, stated David Fesyk, President and Chief Executive Officer of Inter Pipeline Fund. “Corridor is a world-scale pipeline system with excellent development potential. This acquisition solidifies Inter Pipeline’s position as the dominant oil sands gathering business in Canada.”
| Transaction Highlights |
- provides transportation service to the Athabasca Oil Sands Project’s leases, which are estimated to contain over 10 billion barrels of mineable bitumen in place;
- generates highly stable and predictable cash flow through a 25 year ship-or-pay contract with credit worthy shippers;
- strong organic development potential including the current Corridor expansion project and future expansion opportunities;
- provides approximately 25% accretion to cash available for distribution to Inter Pipeline's unitholders following completion of the current expansion project; and
- materially mitigates the impact of proposed new tax legislation on Inter Pipeline's cash available for distribution to unitholders, as outlined in the Federal government's Tax Fairness Plan.
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Inter Pipeline Fund |
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Inter Pipeline is a major petroleum transportation, bulk liquid storage and natural gas liquids extraction business based in Calgary, Alberta, Canada. Structured as a publicly traded limited partnership, Inter Pipeline owns and operates energy infrastructure assets in western Canada, the United Kingdom, Germany and Ireland. Additional information about Inter Pipeline can be found at www.interpipelinefund.com
Inter Pipeline is a member of the S&P/TSX Composite Index. Class A Units trade on the Toronto Stock Exchange under the symbol IPL.UN.
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Eligible Investors
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| Only persons who are residents of Canada, or if partnerships, are Canadian partnerships, in each case for purposes of the Income Tax Act (Canada) are entitled to purchase and own Class A Units and debentures of Inter Pipeline. |
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Disclaimer
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Certain information contained herein may constitute forward-looking statements that involve risks and uncertainties. Readers are cautioned not to place undue reliance on forward-looking statements. Such information, although considered reasonable by the General Partner of Inter Pipeline at the time of preparation, may later prove to be incorrect and actual results may differ materially from those anticipated in the statements made. For this purpose, any statements that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements often contain terms such as "may", "will", "should", "anticipate", "expects" and similar expressions. Such risks and uncertainties include, but are not limited to, risks associated with operations, such as loss of markets, regulatory matters, environmental risks, industry competition and the ability to access sufficient capital from internal and external sources. You can find a discussion of those risks and uncertainties in Inter Pipeline’s securities filings at www.sedar.com. Except to the extent required by applicable securities laws and regulations, Inter Pipeline assumes no obligation to update or revise forward-looking statements made herein or otherwise, whether as a result of new information, future events, or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary note. |
Non-GAAP Financial Measures |
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Certain financial measures referred to in this news release, namely “cash available for distribution” are not measures recognized by GAAP. These non-GAAP financial measures do not have standardized meanings prescribed by GAAP and therefore may not be comparable to similar measures presented by other entities. Investors are cautioned that these non-GAAP financial measures should not be construed as alternatives to other measures of financial performance calculated in accordance with GAAP.
All dollar values are expressed in Canadian dollars unless otherwise noted. |
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