As per the deal signed earlier this year, Wolf Midstream agreed to pay C$1.4bn ($1.1bn) to acquire MEG’s 50% stake in the Access pipeline, which comprises pipelines that transport blended bitumen and diluent between the Christina Lake area of Northeastern Alberta and Edmonton, Canada.

With the acquisition, Wolf Midstream completely owns and operates the Access pipeline project. The firm acquired the initial 50% stake in the project in 2016 from Devon Energy for $1.4bn.

Additionally, Wolf Midstream acquired 100% stake in 900,000 barrel Stonefell oil storage terminal, which is connected to MEG’s production facilities through the Access Pipeline system.

Wolf Midstream CEO Gord Salahor said: “As the Access owner and operator, Wolf now has a tremendous opportunity to expand Access Pipeline’s capacity for bitumen blend and diluent to serve both MEG and Devon as well as third parties.

“We are pleased that this transaction has positioned MEG as an anchor tenant for solvent service on the unutilized Access 16-inch pipeline and prompted additional interest among both natural gas liquids suppliers and oil sands producers.”

A 30-year Transportation Services Agreement (TSA) has also been signed by MEG Energy with Wolf Midstream to transport all production and condensate from MEG’s Christina Lake project to the pipeline.

The transaction was funded by Wolf through an investment by CPPIB of $703m, third-party debt financing and cash on hand.

MEG president and CEO Bill McCaffrey earlier said: “This transaction accomplishes the objectives we set out to achieve in unlocking the value of our midstream assets.

“Our goal was to surface attractive value and terms that allow us to substantially pay down debt, pursue highly economic growth projects and ensure our future transportation and storage needs are met, all while protecting MEG’s competitive cost position.“

—————————-

TankTerminals.com – Research, Market and Expand Your Presence within the Tank Storage Industry
Learn more.