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August 21, 2003

Higher Natural Gas Flows Initiate Temporary Rate Reduction

TransGas Limited today announced it has implemented a mid-year toll reduction of 4% from August 1 to December 31, 2003. The reduction is a direct result of higher than forecast flows on the TransGas system.

As the increased transportation revenue for 2003 will produce a higher return for TransGas than originally budgeted, the toll reduction will allow customers to equitably share the benefits of the increased flows.

“The increased flows are a direct result of the significant natural gas drilling activity in Saskatchewan, buoyed primarily by the Shackleton shallow gas development in the southwest,” said Dean Reeve, Executive Vice President of TransGas. “This temporary reduction in rates for 2003 is a direct result of the strength the industry has shown in their natural gas development results in 2002 and 2003.”

Eugene Setka, Chairman of the Saskatchewan Industrial Gas & Power User’s Association (SIGPUA) says “in light of the extreme volatility and high prices in the energy markets today, the members of SIGPUA sincerely appreciate the efforts of TransGas Limited to economically expand their business and maintain cost competitiveness. These successful endeavors have resulted in the reduction of the transportation and storage costs of natural gas to all consumers in Saskatchewan and reflect the good relationship TransGas has with its customers, working through the Customer Dialogue Process.”

Along with the temporary rate decrease, the assessment for Unaccounted For Gas and Fuel Gas will decrease from 0.85% to 0.50% effective September 1, 2003. This reduced gas-in-kind assessment represents a reduction in the cost to TransGas’ customers of nearly 2 cents per gigajoule at today’s gas prices or the equivalent of a 15% decrease in receipt transportation tolls to the Shipper.

TransGas Ltd. gathers, compresses, stores and has the exclusive franchise to transport natural gas in Saskatchewan. TransGas and its affiliate Many Islands Pipelines (Canada) Limited, own and operate more than 13,900 kilometers of gathering and transmission pipeline in Saskatchewan.

The system utilizes approximately 105,000 horsepower of compression and is expected to transport approximately 315 PetaJoules (PJ) of natural gas during 2003. TransGas, and its subsidiary, MIP(C)L interconnect with most of the major pipelines that transport natural gas from the Western Canadian Sedimentary Basin.

For further information, please call:

Dean Reeve
Executive Vice President
TransGas Limited
(306) 777-9402

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