Pieridae Energy has signed a purchase and sale agreement with Shell’s Canadian entity to purchase all of Shell’s midstream and upstream assets in the southern Alberta Foothills.
Pieridae said on Wednesday that the purchase price was CAD$190 million ($145 million), subject to normal adjustments.
The purchase price will be satisfied via a cash payment to Shell raised by Pieridae through the issuance of term debt and equity and the issuance of the company’s common shares to Shell.
Closing of the acquisition is expected to occur in the third quarter of 2019, pending satisfaction of customary closing conditions and receipt of regulatory approvals.
Pieridae’s CEO Alfred Sorensen said: “[This] also demonstrates solid progress for our flagship Goldboro LNG project.
“We said we would acquire additional gas supplies for the LNG facility and we have done that. Not only does this deal help us secure the remaining conventional natural gas supply needed for the first train of the Goldboro LNG project, it makes Pieridae a major player in the Alberta midstream and upstream industry.”
Shell’s assets in the deal currently produce approximately 28,623 boe/d, consisting of approximately 118.9 mmcf/d) of natural gas, 5,646 bbl/d of NGLs, and 3,161 bbl/d of condensate and light oil.
Pieridae will also acquire Jumping Pound, Caroline, and Waterton deep cut, sour gas processing plants in the acquisition, with a combined capacity of approximately 750 mmcf/d (currently operating with 420 MMcf/d of spare capacity), a 14 percent working interest in the Shantz sulfur forming plant, and approximately 1,700 kilometers of pipelines.
The associated liquids will provide accretive NOI, and the associated gas will provide a large contribution to the 800 MMcf/d of conventional gas supply that is required for train 1 of the Goldboro LNG facility.
The three large gas processing plants included in the acquisition feed into the TC Energy Pipeline System and are located south of the normally congested James River transport corridor. This is anticipated to result in lower transportation tolls to AECO and fewer outages.