Tidewater to build 120 km gas pipeline for TransAlta
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