Inter Pipeline Ltd. (Inter Pipeline) announced on 16 December the successful closing of its acquisition of the remaining 15% interest in the Cold Lake pipeline system from Canadian Natural Resources Limited (Canadian Natural) for CAN$527.5 million, subject to closing adjustments.
This immediately accretive acquisition, announced on 12 December 2016, results in Inter Pipeline owning 100% of the 1400 km Cold Lake pipeline system, which is the largest transporter of Cold Lake area bitumen production.
Canadian Natural received CAN$350 million in cash and CAN$177.5 million through the issuance of 6 417 740 Inter Pipeline common shares in consideration for its Cold Lake ownership interest. Funding for the cash component of the acquisition was provided from proceeds of a new 10 year medium term note offering that closed today.
Concurrent with closing of this acquisition, Inter Pipeline has entered into a binding long-term take or pay agreement with Canadian Natural to transport diluent and bitumen blend for its Kirby North SAGD oil sands project. The agreement will trigger the construction of a new CAN$125 million pipeline connection to the Kirby North production facility, with service targeted for the first quarter of 2020.