Husky Energy has reached an agreement for the sale of its Prince George Refinery to Tidewater Midstream and Infrastructure for $215 million in cash plus a closing adjustment for inventory, and a contingent payment of up to $60 million over two years.
Husky previously announced it was considering selling the Prince George Refinery to focus on its Integrated Corridor and Offshore businesses. The Integrated Corridor is a series of physically-linked assets that includes upstream thermal crude production, storage, committed pipeline capacity and refineries. The Integrated Corridor is designed to maximise margin capture, access to markets and optionality.
The Offshore business focuses on oil and gas production off Canada’s East Coast and in the Asia Pacific region.
“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,” said CEO Rob Peabody. “The plan is aimed at further enhancing the resiliency of the company.”
Proceeds of the sale will be used in accordance with Husky’s funding priorities, which include maintaining the strength of the balance sheet and returning value to shareholders.
In a statement, Husky also confirmed that Tidewater will retain all refinery staff.
The transaction is expected to close in 4Q19, subject to regulatory approvals.
The 12 000 bpd Prince George Refinery, located in Prince George, British Columbia (B.C.), Canada, processes light oil into low-sulfur gasoline and ultra-low sulfur diesel, along with other products.
As part of the sale, Husky will enter into a five-year offtake agreement with Tidewater for refined products from the Prince George Refinery.