MEG Energy Corp. (TSX: MEG) has completed the sale of 50% interest in Access Pipeline and 100% interest in Stonefell Terminal to Wolf Midstream Inc. for cash and other consideration of $1.61 billion.
Wolf Midstream Inc. now owns 100% of Access Pipeline. In October 2016, Wolf Midstream acquired a 50% ownership interest in Access Pipeline from Devon Energy Corp. for $1.4 billion.
Wolf Midstream was formed and is controlled by Canada Pension Plan Investment Board (CPPIB) which owns #SUBSCRIBERS ONLY CONTENT Where did you get your news today? Get insights and see our research on this and all other subscriber ONLY news. Subscribe today and see what you have been missing and be informed.#
The Access Pipeline system includes pipelines that transport blended bitumen and diluent between the Christina Lake area of Northeastern Alberta and Edmonton. The Stonefell Terminal connects MEG’s production facilities, through the Access system, to additional distribution connections, serving as a launch point for large volumes of blended products to reach multiple markets.
“As the Access owner and operator, Wolf now has a tremendous opportunity to expand Access Pipeline’s capacity for bitumen blend and diluent to serve both MEG and Devon as well as third parties,” said Gord Salahor, Wolf’s Chief Executive Officer. “We are pleased that this transaction has positioned MEG as an anchor tenant for solvent service on the unutilized Access 16-inch pipeline and prompted additional interest among both natural gas liquids suppliers and oil sands producers.”
The transaction was funded by Wolf through an investment by Canada Pension Plan Investment Board (CPPIB) of $703 million, third-party debt financing and cash on hand.
CIBC Capital Markets acted as lead financial advisor to Wolf on the transaction. RBC Capital Markets acted as financial advisor and as lead left debt underwriter along with joint-bookrunners CIBC Capital Markets, Scotiabank Global Banking and Markets, and TD Securities. Norton Rose Fulbright Canada LLP acted as legal advisor to Wolf on this transaction.
photo credit: Wolf Midstream