DUKE ENERGY GAINS CANADIAN INFRASTRUCTURE THROUGH WESTCOAST PURCHASE

Banking on its belief that Canada will be an increasingly important natural gas supply source for U.S. markets, Duke Energy Corp. (NYSE: DUK) plans to buy Westcoast Energy Inc. (NYSE: WE) for U.S.$8.5 billion. The deal would give the Charlotte, N.C., diversified energy supplier a significant network

Wall Street natural gas analysts generally applauded the deal. "Duke's merchant power strategy has always led with positions in gas pipelines as an entry into their generation expansion program," said Thomas Hamlin of First Union Securities in Houston. "So what this purchase does for them is lock in transportation related to where the most likely new sources of supply into the U.S. natural gas market are going to come from, which is Canada, both western Canada and from Nova Scotia."

Hamlin told Petroleum Finance Week that he expects more acquisitions to follow. "The acquisition is very consistent with the company's strategy. We have expected them to do acquisitions, and frankly, I expect them to do more," he said. "There's an awful lot of low-valued properties out there. This is the time when companies can make very beneficial acquisitions."