Husky Energy to sell Prince George oil refinery to Tidewater Midstream
Prince George Refinery sale : Husky Energy has agreed to sell its Prince George oil refinery in British Columbia, Canada to Tidewater Midstream and Infrastructure in a deal worth up to CAD 275 million.
The consideration for the Prince George Refinery sale includes CAD 215 million in cash along with closing adjustment for inventory, and a contingent payment of up to $60 million to be paid over two years.
Located in Prince George, the Prince George oil refinery has a processing capacity of 12,000 barrel-per day. The Canadian refinery converts light oil into low-sulphur gasoline and ultra-low sulphur diesel, apart from other by-products.
As part of the Prince George Refinery sale, Husky Energy has signed a five-year offtake agreement with Tidewater Midstream and Infrastructure for refined products from the Canadian oil refinery.
Tidewater Midstream and Infrastructure will retain all the staff working at the Prince George oil refinery.
Husky Energy took the decision to sell the oil refinery in Prince George in order to concetrate on its integrated corridor and offshore businesses.
The Canadian energy company said that the strategic review of its retail and commercial fuels business are in progress.
The Canadian energy company said that the integrated corridor business comprises a series of physically-linked assets made up of upstream thermal crude production, storage, committed pipeline capacity, and also refineries. On the other hand, the offshore business of Husky Energy is engaged in oil and gas production off the Canadian East Coast and in the Asia Pacific region.
Commenting on Prince George Refinery sale, Rob Peabody – Husky Energy CEO, said: “We continue to deliver on Husky’s five-year plan outlined at our Investor Day in May, with an ongoing focus on capital discipline, consistent execution and increased margins.
“The plan is aimed at further enhancing the resiliency of the Company.”
Proceeds from the Prince George Refinery sale are planned to be used in line with the funding priorities of Husky Energy, which include sustaining the strength of the balance sheet and generating value to shareholders.
TD Securities is the financial advisor for the Canadian energy company for the Prince George Refinery sale, while Torys is serving as legal advisor.
The sale of the Prince George oil refinery, which is subject to regulatory approvals, is expected to be completed in Q4 2019.