Wolf Infrastructure Inc, a Calgary-based midstream oil and gas company backed by the Canada Pension Plan Investment Board, is close to buying Devon Energy Corp‘s 50 percent stake in the Access Pipeline in Western Canada, Bloomberg reported on Tuesday.
The deal values Devon’s stake in the Access Pipeline at as much as $1.5 billion (US$1.2 billion) and could be announced as early as this week, the report said.
CPPIB, which invests on behalf of Canada’s national pension plan, has said it sees opportunities for long-term investors to take advantage of falling valuations in the energy sector due to a decline in the price of oil.
If the acquisition materialises, it will be the third in the energy sector involving CPPIB in recent weeks.
Teine Energy Ltd, a Saskatchewan-focused energy producer in which CPPIB holds a 77 percent stake, acquired assets from Canadian producer Penn West Petroleum Ltd in a $975 million deal announced on June 11.
Last week, Canadian oil producer Paramount Resources Ltd agreed to sell some of its Deep Basin oil and gas properties in Alberta to Seven Generations Energy Ltd, in which CPPIB has a 16 percent stake, for $1.9 billion.
CPPIB and Devon Energy declined to comment.
Update: CPPIB last year announced a partnership with Wolf Infrastructure to form a midstream energy infrastructure vehicle.
The partnership initially aimed to invest over $1 billion to acquire, expand and develop midstream assets supporting natural gas and oil and natural gas liquids production in Western Canada.
(Reporting by Matt Scuffham; Editing by Paul Simao)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo courtesy of Reuters/Nick Oxford