CALGARY—Inter Pipeline Ltd. has snapped up Canadian Natural Resources Ltd.’s 15 per cent stake in Alberta’s Cold Lake pipeline system as part of a $527.5 million deal.
Announced Dec. 12, the cash and stock agreement will give Inter Pipeline a full 100 per cent interest in the 1,400-kilometre Cold Lake pipeline network, which carries bitumen for a number of major oilsands players, including Imperial Oil, Cenovus Energy and Canadian Natural.
Along with the pipeline deal, Calgary-based Inter Pipeline has also secured a long-term agreement with Canadian Natural to transport diluent and bitumen blend for its Kirby North oilsands project, which is currently under development outside Conklin, Alberta.
“Inter Pipeline’s purchase of the remaining interest in the Cold Lake pipeline system is a highly logical and immediately accretive investment on a funds from operations basis,” Christian Bayle, the company’s president and CEO, said. “Furthermore with the Kirby North connection, Inter Pipeline secures a material oil sands transportation contract during a challenging time for the energy industry.”
Meanwhile, Inter Pipeline said it will spend $125 million to build a pair of 25-km pipelines and the associated infrastructure to connect its existing network to the Kirby North project northeast of Edmonton.
The deal remains subject to customary closing conditions, but is expected to close by the end of the year.