Husky Energy has reached an agreement under which 65% of its ownership interest in select midstream assets in the Lloydminster region of Alberta and Saskatchewan will be sold to Cheung Kong Infrastructure Holdings Ltd and Power Assets Holdings Ltd (PAH).
Husky will receive US$1.7 billion of gross cash proceeds, will have a 35% interest in the assets and will remain operator.
"We set a high bar for this transaction," said CEO, Asim Ghosh. "It was important to realise full value for these assets and to maintain operatorship and preserve the tight integration between our heavy oil production, marketing and refining assets. We sought partners who shared these objectives and who viewed these as top tier assets that provide considerable growth potential."
The partners are aligned with expanding Husky's heavy oil business and have the funding capacity to build the midstream infrastructure requirements associated with the planned construction of additional Lloyd thermal projects in Saskatchewan and Alberta.
"This transaction unlocks significant value and supports our objective of strengthening the balance sheet," said Ghosh.
The assets involved in this transaction include approximately 1900 km of pipeline in the Lloydminster region and 4.1 million bbls of oil storage capacity at Hardisty and Lloydminster. A new limited partnership will be formed of which Husky will own 35%, Cheung Kong Infrastructure 16.25% and PAH 48.75%.
The transaction is subject to regulatory approval.
Edited from press release by Angharad Lock
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/26042016/husky-energy-to-sell-partial-interest-in-select-midstream-assets-607/