Canadian petroleum transport and storage company Inter Pipeline has acquired Plains Midstream Canada’s Milk River pipeline system in exchange for its 100% ownership of the Empress II straddle plant and 50% ownership of the Empress V straddle plant.
Plains will also pay Inter Pipeline an additional C$35 million (€22.4 million) for the straddle plants. Inter Pipeline says that the two straddle plants, which are located near Empress in Alberta, Canada, at the eastern leg of the TC Energy Alberta System, are geographically remote compared to its core natural gas liquids processing assets.
The Milk River pipeline links Inter Pipeline’s Bow River pipeline system from Milk River, Alberta to the US-Canadian border west of Coutts, Alberta. It has two 16 km pipelines and a throughput volume of 90,000 bpd. The deal also includes pumping and metering facilities, two crude oil storage tanks and truck unloading facilities. Inter Pipeline says that around 90% of the volume that flows through the Milk River pipeline system comes from Bow Rover, so it will receive incremental cash flow from both tariff revenue and marketing activities, generating C$25 million of EBITDA annually.
Christian Bayle, president and CEO of Inter Pipeline says: ‘The Milk River pipeline system has a natural alignment with our Bow River system and this acquisition will improve our access to the Montana refining region, an important delivery market for Inter Pipeline and our customers.’
The transaction is expected to be completed in early 2021.