13 September 2013 15:03 [Source: ICIS news]
TORONTO (ICIS)--Canadian energy infrastructure firm Altagas has agreed to acquire a 25% strategic stake in natural gas liquids (NGL) and crude oil supplier and marketer Petrogas Energy, it said in a regulatory filing issued late on Thursday.
The stake in Petrogas would help Altagas optimise the use of its NGL extraction and gas processing assets, and it would increase its ability to move NGL to customers in the petrochemical and other industries, Altagas said.
In addition, the companies agreed a NGL marketing arrangement under which Petrogas will purchase the NGL produced for AltaGas' account at AltaGas-owned processing facilities.
Petrogas’ assets include terminal and storage facilities with rail access at Canada’s petrochemical hubs in Fort Saskatchewan, Alberta, and Sarnia, Ontario. In the US, Petrogas has terminal and storage facilities at Griffith, Indiana; Conway, Kansas; and Mt Belvieu, Texas. The Calgary-based company has annual revenues of Canadian dollar $2.7bn ($2.6bn).
"Our investment in Petrogas provides strategic alignment with a major North American integrated midstream service provider and brings a unique opportunity to optimise and expand our current midstream assets, increasing our ability to move NGL's and crude oil to meet market demands," said Altagas CEO David Cornhill.
"It also brings key infrastructure needed to develop our LPG [liquefied petroleum gas] export initiative," Cornhill added.
Altagas will acquire the stake by exchanging 2.8m of its shares, valued at about C$100m, and by paying an unspecified amount of cash. The deal is expected to close on 1 October.
($1 = C$1.03)
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