Veresen, KKR form $4.3B midstream gas venture in British Columbia
By JEREMY vAN LOON
Bloomberg
Veresen and KKR & Co. have formed a pipeline and natural gas gathering joint venture to serve producers including Encana in northern British Columbia.
The new business will invest C$5 billion ($4.3 billion) to expand gas infrastructure in the Montney reserve for Encana and its partnership with Mitsubishi.
Veresen Midstream will be funded by debt and cash equity from KKR and Veresen will contribute C$920 million worth of pipelines and processing assets.
British Columbia is trying to become a major exporter of gas. The Montney is one of the main reserves that would supply gas for proposed export facilities on Canada’s Pacific Coast.
As part of the agreement, Encana said it and the Cutbank Ridge Partnership will sell certain assets in the Montney for C$412 million to Veresen Midstream. It will continue to operate the facilities and said it plans to invest as much as $700 million in the Montney in 2015.
Veresen is developing its own liquefied natural gas terminal in Oregon.
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