Wolf Midstream is buying MEG Energy’s 50% stake in Access Pipeline and its Stonefell terminal for $1.61 billion.
With this acquisition, Wolf will become the 100% owner and operator of Access after it acquired 50% of the business in October 2016.
As part of the deal, MEG and Wolf have entered into an agreement dedicating MEG’s Christiana Lake production and condensate transport to Access Pipeline for an initial term of 30 years.
The pipeline transports blended bitumen and diluent between the Christina Lake area of Northeastern Alberta and Edmonton.
Additionally, the transaction also includes an agreement for the Stonefell terminal, which is a 30-year arrangement that secures MEG operational control and exclusive use of the terminal’s 900,000-barrel blend and condensate storage facility.
Gord Salahor, World’s CEO, says: ‘With this transaction, Wolf will be well-positioned to expand Access Pipeline’s capacity for both bitumen blend and diluent to serve its two core customers and third-parties, as well as extend service through the unutilised 16-inch pipeline, now made possible through 100% ownership.’
Bill McCaffrey, MEG’s president and CEO, says: ‘The divesture of our midstream assets strengthens our financial position while providing sufficient liquidity to allow MEG to complete its high return growth projects.’