Pacific Northern Gas Ltd.
TSX : PNG
TSX : PNG.PR.A

Pacific Northern Gas Ltd.

April 07, 2010 17:52 ET

PNG Launches Renewable Power Business With Formation of Partnership and Acquisition of Operating Facility

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 7, 2010) - PNG (TSX:PNG)(TSX:PNG.PR.A) has taken a significant first step in its business diversification strategy by partnering with Skookum Power Corporation, and acquiring the 9.8 MW McNair Creek "run of river" hydro-electricity generation facility from Kiewit Hydropower Investors Inc and Renewable Power. The McNair Creek facility, located on the B.C. Sunshine Coast, has operated for more than 5 years and is well known as a high quality project. The facility's generation is sold under a long-term contract to BC Hydro. Through this acquisition, PNG diversifies its risk profile, grows its asset base and enhances cash flow.

PNG's 97 percent share of the approximately $17 million acquisition cost will be funded by way of assumption of existing non-recourse debt as well as utilization of PNG's current bank facility. PNG's debt to capitalization will be approximately 51 percent after the transaction. The transaction will be cash flow positive and is expected to be EPS accretive in 2011.

PNG has entered into a development and operating agreement with Skookum Power gaining access to extensive expertise in hydrology, engineering and commercial development to support PNG's new business platform. The principals of Skookum Power are former power company executives with collectively more than 50 years experience in the hydro-electricity and energy sectors.

"We are very pleased to commence diversifying and growing our business with this high quality renewable power asset," Roy Dyce, President & CEO said, and, "Further, we're pleased to be working with the seasoned hydro power executives at Skookum Power as PNG develops its renewable power business."

Closing of the McNair Creek acquisition is subject to project lender consent and other standard closing conditions.

FORWARD-LOOKING STATEMENTS

This news release includes forward-looking statements. PNG believes the expectations reflected in such statements are reasonable but no assurance is given that such expectations will be correct. All forward-looking statements are based on management's beliefs and assumptions based on information available at the time the assumption was made and on its experience and perception of historical trends, current conditions and expected further developments as well as other factors deemed appropriate in the circumstances.

By its nature, such forward-looking information is subject to various risks and uncertainties that are known and unknown, including those material risks discussed in the Company's 2010 Annual Information Form under "Risk Factors". Such risks and uncertainties include but are not limited to: general economic conditions and markets; gas supply and availability; gas commodity price volatility; competition; decisions by regulators; seasonal weather patterns; federal and provincial climate change initiatives; financing of investments as well as the value of such investments; the cost and availability of capital; the impact on the Company's liquidity if it were to go offside of the covenants in its debt facilities; successful execution of strategic initiatives; the ability of the Company to attract and retain quality employees; and the impact of accounting changes, including the transition to International Financial Reporting Standards. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

ABOUT THE COMPANY

Headquartered in Vancouver, British Columbia, Pacific Northern Gas Ltd. (TSX:PNG)(TSX:PNG.PR.A) owns and operates natural gas transmission and distribution systems. The Company's western transmission line extends from the Spectra Energy gas transmission system north of Prince George to tidewater at Kitimat and Prince Rupert, and provides service to 12 communities and a number of industrial facilities. In the northeast, Pacific Northern's subsidiary Pacific Northern Gas (N.E.) Ltd. provides gas distribution service in the Dawson Creek, Fort St. John and Tumbler Ridge areas. Further information is available on the Company's website at: www.png.ca.

Contact Information

  • Pacific Northern Gas Ltd. - Investor Inquiries
    Adam Ford
    Manager, Renewable Power
    (604) 697-6223
    or
    Pacific Northern Gas Ltd. - Media Inquiries
    Greg Weeres, P.Eng.
    Vice President, Operations & Engineering
    (604) 691-5680
    www.png.ca