Tidewater Midstream and Infrastructure has acquired Husky Energy's light oil refinery at Prince George, British Columbia for $215 million.
The 12 million barrels per day refinery predominantly produces low sulphur diesel and gasoline, in addition to other products, to supply the greater Prince George region. The refinery has significant onsite storage capacity of more than one Mmbbl and flexible logistics with pipeline, rail and truck connectivity in place.
The Prince George region is generally in short supply of refined products. The refinery's location within the Prince George region makes it a crucial piece of infrastructure with a significant logistical advantage to address the demand for these products.
The acquisition includes an acquired inventory estimated at $62 million, primarily related to light oil feedstock, line fill and refined product in storage.
The acquisition provides improved future distributable cash flow per share which is expected to reduce the company's debt levels.
Tidewater has entered into a five-year offtake agreement with Husky for 90% of the nameplate capacity on diesel and gasoline volumes produced at the refinery. The offtake agreement reflects certain take-or-pay characteristics relating to committed volumes that Husky has agreed to purchase and contains pricing review mechanisms.