Westcoast Energy Inc., an indirect subsidiary of Spectra Energy Corp., has agreed to sell its ownership interests in Spectra's Canadian natural gas liquids (NGL) business to Plains Midstream Canada ULC (PMC), an indirect subsidiary of Plains All American Pipeline LLC (PAA), for approximately C$200 million (US$150 million) plus customary closing adjustments, the companies said Monday.
The transaction includes Westcoast's Canadian NGL integrated system of assets, consisting of the Empress NGL extraction and fractionation facility, the PTC transmission pipeline, seven NGL terminals and two NGL storage facilities in Western Canada, which include 2.4 Bcf/d of NGL extraction capacity and 63,000 b/d of fractionation capacity at Empress, as well as 4.7 million barrels of NGL storage.
"These assets are a strategic fit with our existing core Canadian NGL midstream operations, allowing PMC to enhance its operating efficiencies and commercial synergies while providing optionality for producers in Western Canada and NGL customers throughout Canada and the northern U.S.," said PMC CEO David Duckett.
The divestiture "reinforces Spectra Energy's intent to focus on investing in stable, fee-based natural gas infrastructure in Western Canada," said Spectra Energy CEO Greg Ebel. "The Empress NGL business has served us well over the past decade and monetizing it at this time benefits our investors and allows Empress to continue delivering on its successful track record."
Assuming customary regulatory approvals, the deal is expected to close by mid-2016.
In January, Houston-based PAA announced plans to sell $200-400 million in non-core assets during 2016. On Monday, the company said it had completed two transactions for approximately $250 million on the final day of March, and "five additional transactions totaling approximately $250 million are either under contract or in advanced stages of negotiation and are expected to be consummated in the second quarter of 2016..." The company "is also evaluating additional non-core assets sales and currently expects total asset sales for 2016 will range from $500 million to $600 million," PAA said.