Encana (TSX:ECA, NYSE: ECA) said Tuesday it has agreed to sell its Fort Lupon natural gas processing plant to Western Gas Partners (NYSE: WES) for $303 million.
The plant, located in Colorado, processes about 84 million cubic feet per day (MMcf/d) of natural gas. The sale also includes five natural gas gathering pipeline systems and associated compression facilities.
Under the agreement, Encana USA has processing fees that allows the company to extract about 3,500 barrels of natural gas liquids per day from its processed natural gas.
"This divestiture is part of Encana's ongoing initiative to capture significant incremental value from its midstream assets -- natural gas processing plants, pipeline gathering systems and compression facilities,” said Renee Zemljak, an executive at Encana.
“We are looking to enter into long-term and competitive fee-for-service agreements with industry-leading midstream companies.”
Encana is also trying to sell its Cabin Gas Plant, which has received regulatory approval for two phases of development for a total processing capacity of 800 MMcf/d. The plant is in the early stage of constructing the first phase, which is designed to have capacity of about 400 MMcf/d. The plant is scheduled to start processing natural gas from Horn River, British Columbia in 2012.
The sale of the Fort Lupon plant, subject to regulatory approval, is expected to close in the first quarter of 2011.
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