Aux Sable Affiliate Adds Key Assets in Bakken Area

Bakken Shale
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Aux Sable Liquid Products Enbridge, Veresen and Williams Partners announced that Sable, an affiliate of Aux Sable, has executed an agreement with a wholly owned subsidiary of EOG to purchase and operate the Stanley Condensate Recovery Plant and the Prairie Rose Pipeline. The Prairie Rose Pipeline connects the Stanley Plant to the Alliance Pipeline, which delivers high energy dense phase gas to Aux Sable's Channahon, Illinois Plant for processing. The purchase agreement calls for the US $185 million transaction to close in July 2011.

The Stanley Plant commenced operation in February 2010 and will have a capacity of 80 MMcf per day when a current expansion is completed in June 2011. The plant removes the heavier hydrocarbon compounds while leaving the majority of the natural gas liquids in the rich gas delivered into the Prairie Rose Pipeline.

The 12-inch diameter, 83-mile Prairie Rose Pipeline also commenced operation in February 2010 and gathers gas from the Stanley Plant and other sources for delivery into the Alliance Pipeline system at Bantry, North Dakota. The pipeline has an estimated capacity of 110 MMcf per day and can be easily expanded to meet additional demand.

"This acquisition represents a significant step forward in the pursuit of our strategic growth objectives in the Bakken area, as it provides key infrastructure assets that will lead to increased deliveries of liquids-rich natural gas to our Channahon facilities," said W.J. (Bill) McAdam, President and Chief Executive Officer of Aux Sable. "With this acquisition, Aux Sable will be able to directly engage in and expand its role as a provider of value-added gathering and processing of natural gas and natural gas liquids from the Bakken play."

"As the largest crude oil producer in the North Dakota Bakken, EOG constructed these facilities when there was little infrastructure in the basin. We believe the time is right to sell these assets to an organization that specializes in gathering and processing, allowing us to focus on our core exploration and production activities in the region. We are pleased that Aux Sable recognized the value of both the Stanley Plant and the Prairie Rose Pipeline and are confident that under their management these facilities will benefit all operators in this part of North Dakota," said Ray L. Ingle, President of EOG's Pecan Pipeline (North Dakota), Inc. subsidiary.

Each of Aux Sable and Sable NGL is owned by Enbridge Inc. (42.7% equity interest), Veresen Inc. (42.7% equity interest) and Williams Partners (14.6% equity interest). Enbridge Inc. and Veresen Inc. each own a 50% interest in the Alliance Pipeline.

"We are pleased with this investment in that it bolsters our already strong position in the Bakken, one of the most prolific energy plays in North America," said Al Monaco, President, Gas Pipelines, Green Energy and International, Enbridge Inc. "The Pecan natural gas infrastructure increases the accessibility of the Alliance gas pipeline to Bakken-area producers and draws additional liquids-rich gas to the Aux Sable NGL fractionation plant near Chicago. The investment complements Enbridge's existing Bakken liquids pipeline systems in North Dakota and Saskatchewan. We look forward to working with producers to maximize the value of their resources in this region."

"This transaction demonstrates Veresen's commitment to execute on our strategic plans by expanding our services and presence in liquids-rich resource plays," said Stephen White, President and CEO of Veresen Inc. "The Pecan assets allow us to leverage our existing infrastructure investments, including Aux Sable and Alliance, and enhance our capacity to provide high-value services both to producers and end users."


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