N.E. TANNER, President of TRANSCANADA PIPE LINES, said today the announcement of joint arrangements by the federal and Ontario Governments to build the northern Ontario section of the all Canadian pipeline displayed a "sympathetic understanding of the problems of the project and will result in it being completed much sooner than otherwise would have been possible."
"TransCanada has been working since 1949 to bring into being an all Canada pipeline" stated Mr. Tanner. "We have faced and overcome many difficulties but we might well have had to accept an indefinite delay of our plans had not the Governments of Canada and Ontario decided it to be in the national interest for them to participate in the initial financing and construction of this section of the line, pending the buildup of markets in Eastern Canada.
"This is no gift or subsidy. The requirements upon us as to rental and subsequent purchase of the line are rigorous, but we realize this is necessary and proper. We have entered into the arrangement determined to carry out the spirit and letter of the agreement and we appreciate the farsighted and business like participation of the Governments".
"With this temporary Government intervention, TransCanada is confident that the rest of our arrangements can be greatly facilitated. The pipe we need will be ready for our 1956 program and our financing will now go forward much more quickly with this concrete evidence of Government confidence in our project".
Mr. Tanner confirmed reports that TENNESSEE GAS TRANSMISSION COMPANY will become a substantial shareholder in TransCanada, and confirmed that CANADIAN GULF OIL COMPANY as a major Alberta supplier of natural gas, may also become a shareholder.
"On November 1, 1955, TransCanada and Tennessee Gas Transmission Company entered into an agreement under which a firm order for the total requirements of 34 inch and other inch pipe of the TransCanada line to be built in 1956 from Alberta to Winnipeg and Emerson was placed and financed," he said. "This was essential to secure such large diameter pipe for the 1956 construction. Under this agreement Tennessee was granted an option to purchase shares of TransCanada stock equal in number to those held by each of the original principals, CANADIAN DELHI and the Western group. This amount of stock will represent less than one third of the stock of TransCanada outstanding up to the time of public financing and Tennessee will be required to participate pro rate in supplying capital up to that time.
"The Capital expenditures of TransCanada to date have amounted to nearly $8 million, exclusive of the TorontoNiagara line (costing approximately $5 1/4 million), said Mr. Tanner "By the time plans have been sufficiently advanced to make it prudent to sell stock to the Public, TransCanada may have spent between $13 and $14 million. This will all have been put up by the sponsors over a period of several years at considerable risk.
"When the public financing of about $47 million of common stock money will be required, the difference between the amount then subscribed by the sponsors and the total requirements will be offered in the Canadian market. It is expected by TransCanada that investors in Canada will subscribe for a substantial amount, so that considerably more than 50% of the common stock of the Company will be taken up in Canada."