More North American midstream assets are changing hands.
NuCoastal LLC, a consortium led by former Coastal Corp. chief Oscar Wyatt of Houston, agreed to buy CrossCountry Energy, Houston, from Enron Corp., also of Houston, for $2.2 billion, which includes $430 million in debt.
Alberta-based KeySpan Facilities Income Fund, a midstream energy trust, agreed to buy EnerPro Midstream Co. for $190 million, plus working capital adjustments, from Chevron Canada Resources.
In downstream action, Dow Chemical Co., Midland, Mich., and Kuwait Petroleum Corp. subsidiary Petrochemical Industries Co. (PIC) agreed to form two new 50:50 global petrochemical JVs, pending regulatory approvals.
In gasification technology news:
GE Energy, a division of General Electric Co., Atlanta, plans to acquire ChevronTexaco Worldwide Gasification Technology Inc. (WGTI).
ConocoPhillips and Fluor Corp. have formed an alliance to facilitate worldwide development, design, and construction of projects using ConocoPhillips' "E-gas" technology.
Meanwhile, in recent upstream news:
Petro-Canada, Calgary, agreed to acquire 29.9% interest in Buzzard oil field in the UK North Sea through the purchase of Intrepid Energy North Sea Ltd. for $840 million.
Tullow Oil PLC, London, said it intends to make a stock offer for Energy Africa Ltd., a South African oil and gas exploration and production company.
Acclaim Energy Trust and Enerplus Resources Fund, both Calgary-based firms, agreed to buy 13 producing fields in western Canada from ChevronTexaco Corp. for about $800 million.
Petro-Canada, Calgary, plans to buy Prima Energy Corp., Denver, through a tender offer worth $534 million, or $39.50/share.
NuCoastal-CrossCountry
Enron formed CrossCountry in June 2003 as a holding company for its interests in three natural gas pipeline systems: Transwestern Pipeline Co., Citrus Corp., and Northern Plains Natural Gas Co. Together, the three companies have 9,900 miles of pipeline systems with 8.5 bcfd of gas capacity.
The deal remains subject to approval by the US Bankruptcy Court in New York that oversees Enron's Chapter 11 case. Other potential buyers will have an opportunity to submit higher bids. Pending necessary court and regulators' approvals, the deal is expected to close by fourth quarter.
In addition to Wyatt, NuCoastal owners include affiliates of Citigroup Inc. of New York, and private equity investment firms Kelso & Co. of New York and ArcLight Capital Partners LLC of Boston. Wyatt founded Coastal Corp., which Houston-based El Paso Corp. acquired in 2001.
One of the pipeline companies involved in the NuCoastal-Enron deal holds interests in a master limited partnership.
Northern Plains is one of the general partners of Northern Border Partners LP, Omaha. Northern Border owns interest in Northern Border Pipeline Co., Midwestern Gas Transmission Co., Viking Gas Transmission Co., and Guardian Pipeline LLC.
If the transaction is finalized, NuCoastal would own 1.65% of the aggregate 2% general partnership interest in Northern Border and would be entitled to an 82.5% vote on the company's partnership policy committee.
Keyspan-EnerPro
KeySpan expects its acquisition of EnerPro to close in the third quarter. EnerPro owns and operates gas and oil facilities throughout Alberta and NGL fractionation facilities at Fort Saskatchewan, Alta.
New York-based Standard & Poor's Ratings Services said the EnerPro acquisition would not change KeySpan's Canadian stability rating and outlook.
Dow-PIC
One new JV formed by Dow and PIC will be called MEGlobal, which will manufacture and market monoethylene glycol and diethylene glycol (EG).
Dow will sell to PIC a 50% interest in its Canadian ethylene glycol assets. MEGlobal will purchase ethylene from Dow and market excess EG produced in Dow's plants in the US and Europe.
The second JV will be called Equipolymers and will produce and market polyethylene terephthalate (PET) resins as well as purified teraphthalic acid (PTA).
Dow plans to sell to PIC a 50% interest in its PET-PTA business, which includes assets in Germany and Italy.
GE-WGTI
The acquisition of ChevronTexaco WGTI will broaden GE Energy's gasification plant offerings and expand its ability to provide coal power generation that produces fewer air pollutants than conventional coal combustion, a GE spokesman said.
The ChevronTexaco technology develops and licenses gasification-related intellectual property for use in the chemicals, electric power, and hydrogen producing industries.
GE Energy said it would keep the gasification business headquarters in Texas.
ConocoPhillips, Fluor
The companies jointly will provide licensing, project development support, engineering, and turnkey contracts for construction of solid fuel gasification facilities.
The technology incorporates a gasification system design that can be applied with gas turbine and steam power generation in an integrated gasification combined-cycle configuration to produce electric power and coproduce synthesis gas, hydrogen, and steam.
The technology can convert coal and other low-grade feedstocks into a synthesis gas containing hydrogen, enabling removal of most pollutant-forming impurities.
Petro-Canada-Intrepid Energy
Intrepid Energy's major asset is its working interest in Buzzard. The transaction also includes adjacent acreage with exploration potential.
The field is estimated to hold 1.2 billion bbl of OOIP. Petro-Canada estimates recovery will be 550 million bbl. Buzzard is operated by EnCana (UK) Ltd.
Buzzard, 100 km northeast of Aberdeen, is under development with first oil expected in 2006. It's the largest UK North Sea oil discovery in more than a decade. Petro-Canada's share of peak production is expected to average 60,000 b/d if the acquisition proceeds.
Tullow-Energy Africa
Tullow said it intends to offer $500 million for the outstanding shares of Energy Africa. Shareholders representing 90.52% of Energy Africa's stock have indicated a willingness to accept the offer.
In addition, Tullow has agreed to acquire a 50% stake in a JV of African Petroleum Investment Ltd. (APIL) and Energy Africa. Tullow is buying that interest from APIL for $70 million.
The acquisitions will provide Tullow with an almost equal balance between oil and gas production, the company said.
Upon completion of the stock offering, Tullow anticipates that it will have production of more than 50,000 boe/d.
Acclaim, Enerplus acquisition
ChevronTexaco's North America Exploration & Production Co. expects that the sale to Acclaim Energy and Enerplus will close by third quarter.
The transaction includes oil and gas producing properties in the Northwest Territories, British Columbia, Alberta, and Manitoba.
"These assets have played a significant role in our history in Canada for the past 65 years," said Alex Archila, president of Chevron Canada Resources. "While they have been a profitable part of our portfolio for many years, the combination of current market conditions and the size of the assets relative to our portfolio makes this an ideal time for a divestiture."
The company's ongoing portfolio optimization program does not affect the Athabasca oil sands project, Mackenzie Delta gas, and ChevronTexaco's Canadian east coast exploration, development, and production activities.
Petro-Canada, Prima Energy
Petro-Canada and Prima Energy boards unanimously approved this transaction, and Prima shareholders owning 21% of the common stock already agreed to tender their shares.
The tender offer was expected to be launched by June 16.
Closing of the tender offer is subject to customary closing conditions, including the valid tender of at least a majority of the outstanding shares of common stock and regulatory approvals.
A vote of Prima's stockholders will be required only if fewer than 90% of its shares are tendered into the Petro-Canada offer.
