Anadarko to Divest Canadian LNG Terminal Project
Anadarko Petroleum Corp. has agreed to sell Bear Head LNG Corp., a wholly owned subsidiary that is developing a liquefied natural gas (LNG) receiving terminal at Point Tupper, N.S.
Under the agreement with U.S. Venture Energy, a private equity firm, Anadarko will receive $125 million as well as an 18-month option to secure up to 350 million cubic feet per day of throughput capacity at competitive rates. The option period begins once the transaction closes.
"With the sale, we are recovering our investment and a reasonable premium, while retaining the ability to supply LNG to the Canadian Maritimes and U.S. Northeast consuming regions," Anadarko Senior Vice President Karl Kurz said. "From the beginning, Anadarko pursued Bear Head as a means to commercialize international natural gas resources. We committed to our investors that we would either secure an upstream supply source or would explore other options with our terminal within a 2-year period. With this agreement, we retain the upstream opportunity in the near term without owning and operating the LNG terminal.”
Kurz added that the decision is consistent with Anadarko’s recently announced plans to divest its Canadian subsidiary. The proceeds will be used to retire debt associated with Anadarako’s pending acquisitions of Kerr-McGee and Western Gas Resources.
The sale to U.S. Venture Energy includes all assets, rights, and obligations associated with the Bear Head project, excluding long-term pipeline transportation agreements. It is expected to close within a few weeks, subject to normal and customary conditions. Anadarko plans to work closely with U.S. Venture Energy during the transition.
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