BP to sell Canada natural gas liquids unit to Plains
BP has agreed to sell its Canadian natural gas liquids (NGL) and liquefied petroleum gas (LPG) business to the midstream subsidiary of Plains All American Pipeline for $1.67 billion in cash, subject to customary adjustments.
BPs Canadian NGLs business owns, operates and has contractual rights to assets involved in the extraction, gathering, fractionation, storage, distribution and wholesale marketing of NGLs across Canada and in the Midwest US.
Assets include NGL extraction plants; pipeline gathering systems; fractionation plants; and storage and specification product distribution facilities.
"BPs Canadian NGL business is an asset-rich platform that significantly expands our LPG asset footprint, providing a supply-based complement to our existing demand-focused business and making [Plains] one of the largest LPG service providers in North America, said Greg L. Armstrong, CEO of Plains.
We expect to be able to generate meaningful operating and commercial synergies by more fully connecting, integrating and utilizing these assets together with our existing North American LPG assets and our Canadian crude oil assets and activities," he added.
In total, the business owns or has rights to approximately 4,000 kilometres of pipeline systems; 21 million bbl of storage capacity; 232,000 bpd of fractionation capacity; and NGLs produced from 8.3 billion cubic feet/day of gas processing capacity.
Bob Dudley, BP CEO, said: Canada remains an important part of our portfolio of growth opportunities to meet North Americas energy needs.
The business employs approximately 450 people who will transfer to Plains Midstream upon completion of the deal.
Completion of the transaction is subject to closing conditions including the receipt of all necessary governmental and regulatory approvals.
The transaction is expected to be completed by the end of the first half of 2012.
Credit Suisse acted as the sole financial advisor to BP for this transaction, according to the company.
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