Inter Pipeline selling oil storage terminals after petrochemical plant cost revision
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The company said it will retain storage tanks in Sweden and Denmark capable of holding 19 million barrels.
“This is a very positive transaction for Inter Pipeline,” president and CEO Christian Bayle said in a release Tuesday, noting that the sale allows the company to refocus on its “higher growth Canadian business.”
“As such proceeds from the sale will be used to reduce debt, strengthen our balance sheet and assist with financing our large capital expenditure program, including the Heartland Petrochemical complex,” he said.
The petrochemical project near Edmonton has been one of the company’s main focus areas in recent years and also a source of stress as the project’s costs were revised upward from $3.5 billion to $4 billion earlier this year. The facility, which will process 22,000 barrels of propane per day into polypropylene plastic pellets, has also secured $200 million in royalty credits from the Alberta government’s petrochemical diversification program.
Inter Pipeline has been looking to sell part of its interest in the project to a joint-venture partner. As costs have risen, so too has investor and analyst pressure on the company to find a partner for the facility. The company is also looking to sign up customers for long-term contracts for the project.
