Veresen Inc., through a wholly owned subsidiary, entered into agreements with Encana Corporation to acquire the Hythe/Steeprock midstream gas gathering and processing complex for $920 million.
These assets are located in the Cutbank Ridge region of Alberta and British Columbia. The complex includes two natural gas processing plants with combined functional capacity of 516 MMcf/d as well as approximately 40,000 hp of compression and 370 km of gas gathering lines. The Hythe plant processes both sour and sweet natural gas, while the Steeprock plant is a sour gas processing facility.
In connection with the acquisition, Veresen and Encana have entered into a long-term Midstream Services Agreement under which Encana will provide a competitive, long-term, take-or-pay throughput commitment averaging 370 MMcf/d, representing 72 per cent of the functional capacity of the complex. Veresen will become the operator of the two interconnected gas processing plants after a transition period.
The acquisition of the Hythe/Steeprock complex establishes an independent midstream business for Veresen in an area focused in the high-growth Montney zone, one of North America's most prolific, low-cost natural gas and NGL plays.
The assets are high quality, of-scale facilities including the Steeprock gas plant, the Hythe gas plant, approximately 40,000 hp of sweet and sour compression and 370 km of gathering lines, and also provide connections to the Alliance and TransCanada pipeline systems.
Veresen was represented by Kevan King, Senior Vice President, General Counsel and Secretary of Veresen, and by Bennett Jones LLP with a team led by Pat Maguire (oil & gas) and Renee Ratke (M&A); which included Thomas McInerney, Karen Beattie, Krishna Koul, Luke Morrison, Sean Assie and Kim Kapesi-Miller (oil & gas); Neil Stevenson, Harinder Basra, Kahlan Mills and Adrienene Roy (M&A); Phil Backman, Dave Lennox and Karen Dawson (financial services); Darcy Moch (tax); Marie Buchinski (regulatory); Beth Riley (competition) and John Batzel (employment services).
Encana was represented by Graham Baugh, Vice-President and Associate General Counsel, Canadian Division Legal Services, Janaya Flower, Legal Counsel, Canadian Division and Donald MacDiarmid, Legal Counsel, Canadian Division, and by Blake, Cassels & Graydon LLP with a team that was led by Chris Christopher (oil & gas) that included Jana Prete, Julia Stadnyk and Ian Gordon (oil & gas); Chad Schneider (M&A); Lars Olthafer (regulatory); Brian Thiessen (employment services); Jason Gudofsky and Micah Wood (competition) and Zvi Halpern-Shavim (tax) and by Burnet, Duckworth & Palmer LLP with a team that was led by Bill Winters (oil & gas) that included Mark Houston and Ashley Weldon (oil & gas).