Petrogas acquires Chevron export facility

Petrogas Energy Corp. has announced that it has entered into a binding agreement with Chevron USA Inc. for the purchase of Chevron's Ferndale, Washington storage and distribution facility for bulk shipments of propane, butane and iso-butane (LPG). The transaction price is confidential and the purchase is subject to usual government and regulatory body approvals. The closing date is expected to be on 31^st March 2014.

The Ferndale terminal acquisition provides a strong fit for AltaGas Ltd and Idemitsu Kosan Co. Ltd, which recently acquired interests in Petrogas, providing AltaGas with direct offtake for its proprietary production and for Idemitsu to acquire North American LPG for its LPG sales and distribution infrastructure in Japan, as well as its other interests in Southeast Asia.

The Ferndale terminal has the capability to handle exports and imports of up to 30 000 bbls/d of LPG and the facilities to handle and supply propane to the regional market for US domestic consumption. The terminal has rail, truck and pipeline capability and is connected to two local refineries offering LPG balancing services.

Commenting on the transaction, Chief Executive Officer, Stanley Owerko, noted that recent market and logistical developments have led many Western Canadian producers to seek alternative outlets for their production. The Cochin pipeline, originating in Edmonton, Alberta, and terminating in Sarnia, Ontario, has been a strategic outlet for Western Canadian propane production since the 1970s, having the capability to handle up to 50 000 bbls/d of propane. The recent decision to take the Cochin pipeline out of propane service and to convert it to a diluent pipeline has left Western Canadian producers in a difficult position for managing their production.

"Petrogas is well positioned to provide additional takeaway capacity with its recently expanded Ft. Saskatchewan terminal, providing an outlet for increasing LPG production in the Western Canadian sedimentary basin," said Owerko.

Adapted from press release by Rosalie Starling

Read the article online at: https://www.worldpipelines.com/business-news/05032014/petrogas_acquires_chevron_export_facility_124/