Inter Pipeline Ltd. (Inter Pipeline) has announced 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% ownership interest in the Empress II and 50% ownership interest in the Empress V straddle plants. Plains will also pay Inter Pipeline cash proceeds of US$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 km pipelines with current throughput volume of approximately 90 000 bpd and links Inter Pipeline's Bow River pipeline system from Milk River, Alberta to the US/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% 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 US$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.
Read the article online at: https://www.worldpipelines.com/business-news/30092020/inter-pipeline-to-acquire-milk-river-pipeline-system/