Two Utilities Trusts for Income Investors

Article Excerpt

FORT CHICAGO ENERGY TRUST $11.88 (Toronto symbol FCE.UN; SI Rating: Extra Risk) owns 50% of the Alliance Pipeline, a 36-inch diameter natural gas pipeline with a capacity of 1,550 million cubic feet per day. It extends 3,000 kilometres from Fort St. John in B.C. to Chicago, Illinois. Enbridge Inc. owns the other 50% interest. The other assets held by the two partners are 85.4% of the Aux Sable natural gas liquids plant. Fort Chicago diversified its pipeline operations in 2004 with the purchase of the 1,324-kilometre Alberta Ethane Gathering System for $273.3 million. It’s now pursuing a number of growth projects, including investments in the proposed one billion cubic foot per day Jordan Cove liquified natural gas (LNG) terminal in Oregon, and the proposed Pacific Connector pipeline, designed to bring that gas to market. In the three months ended December 31, 2005, Fort Chicago’s revenues rose 5.5%, to $231.7 million from $219.6 million a year earlier. Cash flow per unit fell 16.7%,…

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