Tide­wa­ter to build 120 km gas pipe­line for Tran­sAlta

Stockwatch Daily - - ENERGY - Mr. Joel MacLeod of Tide­wa­ter re­ports

TIDE­WA­TER MIDSTREAM and In­fra­struc­ture Ltd. and Tran­sAlta Corp. have en­tered into a let­ter of in­tent (LOI) for Tide­wa­ter to con­struct a 120-kilo­me­tre nat­u­ral gas pipe­line from its Brazeau River com­plex (BRC) to Tran­sAlta’s gen­er­at­ing units at Sun­dance and Keep­hills. The pipe­line is ex­pected to cost ap­prox­i­mately $150-mil­lion and is sup­ported by a 15-year take-or-pay agree­ment with Tran­sAlta.

The pipe­line will pro­vide ini­tial ca­pac­ity of 130 mil­lion cu­bic feet per day by 2020, and have ex­pan­sion ca­pa­bil­ity to 340 mil­lion cu­bic feet per day, which rep­re­sents ap­prox­i­mately 50 per cent of Tran­sAlta’s gas re­quire­ments at full ca­pac­ity of the gen­er­at­ing units at Sun­dance and

Keep­hills. Un­der the LOI, Tran­sAlta has the op­tion to in­vest up to 50 per cent in the pipe­line.

“Con­struc­tion of the nat­u­ral gas pipe­line sup­ports our strat­egy of be­ing a low-cost provider of firm, clean and re­li­able en­ergy”, said Dawn Far­rell, pres­i­dent and chief ex­ec­u­tive of­fi­cer of Tran­sAlta. “In ad­di­tion, hav­ing greater ac­cess to nat­u­ral gas al­lows Tran­sAlta to blend nat­u­ral gas with the coal, prior to fully con­vert­ing the units, al­low­ing us to take ad­van­tage of low nat­u­ral gas prices and re­duce our car­bon costs.”

“Tide­wa­ter is ex­cited to en­ter into a long-term ar­range­ment with Tran­sAlta which is sup­ported by a 15-year take-or-pay agree­ment that pro­vides oil and gas pro­duc­ers through­out Western Canada with di­rect con­nec­tiv­ity to a new, large de­mand source,” said Joel MacLeod, pres­i­dent and chief ex­ec­u­tive of­fi­cer of Tide­wa­ter. “This agree­ment with Tran­sAlta en­ables Tide­wa­ter to trans­port pro­duc­tion di­rect from the well­head through Tide­wa­ter’s ex­ten­sive nat­u­ral gas pro­cess­ing and stor­age in­fra­struc­ture net­work di­rect to an end mar­ket.”

Pro­posed is­suance of se­nior un­se­cured notes

Tide­wa­ter in­tends to is­sue, sub­ject to mar­ket and other con­di­tions, a pro­posed pri­vate place­ment of se­nior un­se­cured notes.

Tide­wa­ter in­tends to use the net pro­ceeds from the of­fer­ing for a non-per­ma­nent re­pay­ment of in­debt­ed­ness un­der Tide­wa­ter’s ex­ist­ing credit fa­cil­ity, drawn to fi­nance its var­i­ous cap­i­tal projects, and for general cor­po­rate pur­poses.

Deep basin and Mont­ney re­gion ac­qui­si­tion Tide­wa­ter’s pre­vi­ously an­nounced ac­qui­si­tion of cer­tain as­sets in the Deep basin and Mont­ney re­gion for net cash con­sid­er­a­tion of $34-mil­lion, sub­ject to cus­tom­ary ad­just­ments, has closed in es­crow. Fi­nal clos­ing of the trans­ac­tion is sub­ject to reg­u­la­tory li­cence trans­fer ap­provals and is ex­pected to oc­cur in De­cem­ber, 2017. An im­ma­te­rial por­tion of the as­sets is be­ing held in es­crow pend­ing res­o­lu­tion of a right-of-first-re­fusal chal­lenge.

Clos­ing of credit fa­cil­ity in­crease

Tide­wa­ter is pleased to an­nounce that an in­crease to its credit fa­cil­ity has closed. Tide­wa­ter’s bank­ing syn­di­cate in­creased this credit fa­cil­ity from $180-mil­lion to $250-mil­lion.

About Tide­wa­ter Midstream and In­fra­struc­ture Ltd.

Tide­wa­ter’s busi­ness ob­jec­tive is to build a di­ver­si­fied mid-stream and in­fra­struc­ture com­pany in the North Amer­i­can nat­u­ral gas and nat­u­ral gas liq­uids space. Its strat­egy is to prof­itably grow and cre­ate share­holder value through the ac­qui­si­tion and de­vel­op­ment of oil and gas in­fra­struc­ture. Tide­wa­ter plans to achieve its busi­ness ob­jec­tive by pro­vid­ing cus­tomers with a full-ser­vice, ver­ti­cally in­te­grated value chain through the ac­qui­si­tion and de­vel­op­ment of oil and gas in­fra­struc­ture in­clud­ing: gas plants, pipelines, rail­cars, trucks, ex­port ter­mi­nals and stor­age fa­cil­i­ties.

We seek Safe Har­bor.

Dou­glas Scott Fraser, Stephen John Holyoake, Joel A MacLeod, To­bias J McKenna, Trevor P Wong-Chor

(TWM) Shares: 328,948,397

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