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Monday, September 22, 2014

Veresen to acquire half stake in Ruby pipeline for $1.43 bln, (TSE: VSN.TO)

Veresen Inc, a Canadian pipeline company developing the Jordan Cove liquefied natural gas facility in Oregon, said on Monday it has agreed to acquire Global Infrastructure Partners' half interest in the Ruby pipeline system for $1.43 billion. Calgary-based Veresen will become Kinder Morgan Inc's equal partner in the Ruby line, which carries as much as 1.5 billion cubic feet per day of natural gas 680 miles (1,100 km) from the Opal, Wyoming hub to the Malin hub in southern Oregon. From there the gas will travel by a new pipeline to Jordan Cove.Veresen is acquiring Global Infrastructure's convertible preferred shares, which can be converted into common shares at its option. Kinder Morgan will remain as operator of the pipeline."This is a rare opportunity to acquire a large interest in a core U.S. pipeline asset," Don Althoff, Veresen's chief executive, said in a statement. Ruby is an ideal fit for Veresen ... and provides significant future added upside related to our Jordan Cove LNG project."To pay for the project, Veresen will sell 48.8 million of subscription receipts priced at C$16.40 each to a group of underwriters led by Scotiabank that will raise about C$800 million ($730 million). Each receipt can be converted into a Veresen share once the deal closes in the fourth quarter. The remainder of cost will be funded by debt.

Veresen Inc. is a Canadian corporation, which manages its pipeline transportation, midstream services, and power generation businesses. Shares of VSN fell by 1.49% or $-0.26/share to $17.17. In the past year, the shares have traded as low as $11.80 and as high as $19.80. On average, 441136 shares of VSN.TO exchange hands on a given day and today's volume is recorded at 607241.