Husky Energy Inc. has agreed to sell its 12,000-b/d refinery in Prince George, BC, to Tidewater Midstream & Infrastructure Ltd. for $215 million (Can.) in cash plus a closing adjustment for inventory.
Scheduled to close during this year’s fourth quarter pending regulatory approvals, the deal also includes a contingent payment of as much as $60 million over 2 years, Husky said.
As part of the sale, Husky will enter into a 5-year offtake agreement with Tidewater for refined products from the refinery, including 90% of the nameplate capacity on diesel and gasoline volumes produced at the site, the companies said.
Tidewater will retain all refinery staff and Husky’s proceeds of the sale will be used in accordance with the company’s funding priorities, including maintaining the strength of the balance sheet and returning value to shareholders, Husky said.
The Prince George refinery processes light oil into low-sulfur gasoline and ultralow-sulfur diesel, along with other products.
The proposed sale follows Husky’s previously announced plan to consider selling the Prince George refinery as part of a strategy to focus on core assets in its integrated corridor and offshore business in Atlantic Canada and the Asia-Pacific region, which includes a series of physically linked assets involving upstream thermal crude production, storage, committed pipeline capacity, and refineries (OGJ Online, Jan. 11, 2019).
Robert Brelsford | Downstream Editor
Robert Brelsford joined Oil & Gas Journal in October 2013 as downstream technology editor after 8 years as a crude oil price and news reporter on spot crude transactions at the US Gulf Coast, West Coast, Canadian, and Latin American markets. He holds a BA (2000) in English from Rice University and an MS (2003) in education and social policy from Northwestern University.
