Feb. 1, 2008
TransCanada acquisitions boost profit
$250 milion Bruce power overruns the lone dark spot in picture
CALGARY
TransCanada Corp. has seen its recent profits surge as the Calgary-based pipeline and power utility made several acquisitions and juggled a number of expensive mega-projects.
Profit for the fourth quarter was $377 million, up from $269 million. Revenue rose to $2.19 billion from $2.09 billion.
“TransCanada’s strong financial performance in the fourth quarter and throughout 2007 is a result of solid contributions from our existing assets and the growing cash flow and earnings from newly acquired and developed assets,” CEO Hal Kvisle said.
Last February, TransCanada bought American Natural Resources Co., ANR Storage and a greater stake in Great Lakes Gas Transmission Limited Partnership for $3.4 billion.
Those takeovers contributed 17,000 kilometres of pipeline and 230 billion cubic feet of natural gas storage capacity in Michigan, TransCanada said.
The one dark financial cloud for the company is its involvement in the Bruce nuclear power plant, where Kvisle warned the refurbishment of two reactors is expected to go at least $250 million over its original budget of $2.75 billion.
He said the cost could creep beyond $3 billion and his company is currently re-working its cost estimates for the project. “There have been a number of first-of-a-kind activities that were really required to do this refurbishment,” Kvisle told a conference call with analysts.
Earlier this month, the Alaskan government said TransCanada was the only bidder to meet its requirements for the construction of a $26-billion pipeline that would carry natural gas from Alaska’s North Slope to the lower 48 U.S. states.
In November, TransCanada filed an application to build a $1-billion pipeline across the northern portion of Alberta that would transport natural gas from the west to oilsands projects in the east. The North Central Corridor pipeline could link up with the proposed terminus of the long-stalled Mackenzie Gas Project.
“We would be hopeful that we could make some progress in the next few months to the point of knowing whether or not we should persist with the project,” Kvisle said.
There have been rumours that the Imperial Oil-led consortium in charge of the Mackenzie project had reached a deal to shift responsibility to TransCanada and the Aboriginal Pipeline Group as the estimated cost for the pipeline ballooned from $7.5 billion to $16.2 billion over the course of two years.
TransCanada said it is not necessarily interested in taking control away from the consortium of producers, but is willing to do whatever is necessary to jump-start the project, Kvisle said.
