Calgary-based energy infrastructure company Inter Pipeline has agreed to acquire the Milk River pipeline system from the Canadian affiliate of Plains All American Pipeline. Plains will receive 100 percent ownership in the Empress II and 50 percent ownership in the Empress V straddle plants, and pay C$35 million to Inter Pipeline. Plains is backed by EnCap Investments, Energy Minerals Group, Kayne Anderson Capital Advisors, First Reserve and Stonepeak Partners.
PRESS RELEASE
Inter Pipeline to Acquire Milk River Pipeline System in Exchange for Empress II and V Straddle Plants
CALGARY, AB, Sept. 28, 2020 /CNW/ – Inter Pipeline Ltd. (“Inter Pipeline”) (TSX: IPL) announced today that it has agreed to acquire the Milk River pipeline system from Plains Midstream Canada ULC (“Plains”), a wholly owned subsidiary of Plains All American Pipeline, L.P., in exchange for its 100 percent ownership interest in the Empress II and 50 percent ownership interest in the Empress V straddle plants. Plains will also pay Inter Pipeline cash proceeds of $35 million. Closing of this transaction is expected to occur in early 2021 following completion of customary conditions.
“This transaction is expected to be accretive to funds from operations and provide meaningful operational and commercial synergies with our existing conventional oil transportation business” said Christian Bayle, President and Chief Executive Officer of Inter Pipeline. “The Milk River pipeline system has a natural alignment with our Bow River system and this acquisition will improve our access to the Montana refining region, an important delivery market for Inter Pipeline and our customers.”
The Milk River pipeline system is comprised of two 16-kilometer pipelines with current throughput volume of approximately 90,000 barrels per day and links Inter Pipeline’s Bow River pipeline system from Milk River, Alberta to the U.S./Canadian border west of Coutts, Alberta. The transaction also includes pumping and metering facilities, two crude oil storage tanks and truck unloading facilities. Approximately 90 percent of the volume that flows through the Milk River pipeline today originates from the Bow River system and Inter Pipeline will receive incremental cash flow from both tariff revenue and marketing activities. This pipeline system is expected to generate approximately $25 million of annual EBITDA.
The Empress II and Empress V straddle plants are geographically remote compared to Inter Pipeline’s core natural gas liquids processing assets. These two straddle plants, currently operated by Plains are located near Empress, Alberta on the eastern leg of the TC Energy Alberta System.
About Inter Pipeline Ltd.
Inter Pipeline is a major petroleum transportation, natural gas liquids processing, and bulk liquid storage business based in Calgary, Alberta, Canada. Inter Pipeline owns and operates energy infrastructure assets in western Canada and Europe. Inter Pipeline is a member of the S&P/TSX 60 Index and its common shares trade on the Toronto Stock Exchange under the symbol IPL. www.interpipeline.com
Contact Information
Investor Relations:
Jeremy Roberge
Vice President, Finance and Investor Relations
Email: investorrelations@interpipeline.com
Tel: 403-290-6015 or 1-866-716-7473
Media Relations:
Breanne Oliver
Director, Corporate Communications
Email: mediarelations@interpipeline.com
Tel: 587-475-1118
If you do not receive this within five minutes, please try and sign in again. If the problem persists, please
email: subscriptions@peimedia.com.