A $1m non-refundable option extension fee has been paid by MLCI to PNG to extend to June 30, 2010, an exclusive option granted by PNG to MLCI in March 2009 to contract for firm gas transportation capacity for a two to five year primary term, with a right to renew for an additional two to five year term.
MLCI may extend the option period by up to three further six month periods, with payment of $1m for each extension. If MLCI exercises its option, the PNG pipeline system would be at close to full capacity utilization, generating almost $15m per year of incremental revenue for the benefit of PNG and its customers.
If the option is exercised, the commencement date for the transportation service is expected to be between January 1, 2012 and January 1, 2013. PNG can provide no assurances that MLCI will exercise their option or further extend the option period, PNG said.
Headquartered in Vancouver, British Columbia, PNG owns and operates natural gas transmission and distribution systems. The company’s western transmission line extends from the Spectra Energy (formerly Duke Energy) gas transmission system north of Prince George to tidewater at Kitimat and Prince Rupert. In the northeast, Pacific Northern’s subsidiary Pacific Northern Gas (NE) provides gas distribution service in the Dawson Creek, Fort St. John and Tumbler Ridge areas.
