Canada: AltaGas Ups Petrogas Stake

AltaGas Ups Petrogas Stake

AltaGas said that it will increase its effective ownership of Petrogas Energy to 33 1/3 percent.

AltaGas plans to transfer its current 25 percent ownership to the AltaGas Idemitsu Joint Venture Limited Partnership. The Partnership will acquire an additional 41 2/3 percent interest in Petrogas. As a result of the transaction, Petrogas will be owned one-third by each of AltaGas, Idemitsu Kosan and its current shareholder.

In January 2013 AltaGas and Idemitsu announced plans to pursue LPG and LNG export opportunities from Canada’s West Coast to Asia. LPG exports could begin as early as 2016. Petrogas’ extensive logistics network consists of over 1,500 rail cars and 24 rail and truck terminals, which provides the key infrastructure as well as supply logistics and marketing expertise required to pursue LPG export opportunities.

Idemitsu is a global leader in the supply of energy, petroleum, lubricants and petrochemical products and services to the people of Japan. Included in its suite of businesses, Idemitsu owns four refineries with capacity of 640,000 bbls/d and processes one million tonnes of ethylene per year and is 51 percent owner of Astomos Energy Corporation, one of the world’s largest shippers and marketers of LPG. AltaGas is experienced in constructing large scale energy projects on-time and on-budget and over the past five years has constructed over $1.2 billion of clean energy projects in British Columbia.

“We are excited about the capabilities all three organizations bring to this international energy business,” said David Cornhill, Chairman and CEO of AltaGas. “AltaGas and Petrogas bring key infrastructure assets and marketing expertise which, combined with Idemitsu’s global leadership in energy supply and access to markets in Asia, greatly enhance our ability to move LPG exports and other opportunities forward.”

No additional funding by AltaGas is required to increase its effective ownership from 25 percent to one-third. AltaGas expects the acquisition to be accretive to earnings per share by approximately $0.10 in 2015. AltaGas’ one-third interest in Petrogas will be acquired for approximately $440 million.

The acquisition is subject to customary regulatory approvals, including the Competition Act, Hart Scott Rodino Antitrust Improvement Act of 1976, and Investment Canada Act, and is expected to close in first quarter 2014.

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LNG World News Staff, October 25, 2013; Image: AltaGas