Topaz Energy, a private royalty and infrastructure company, has completed acquisition of 12.5% stake in Glacier gas plant from Advantage Oil & Gas for cash consideration of CAD100m ($73.7m).

The transaction follows signing of a definitive agreement by Advantage to sell stake in Glacier gas plant in April this year.

The plant is capable of processing 400 million cubic feet per day (mmcf/d) of raw gas and services the Montney resource play.

With the Glacier plant acquisition, Topaz and Advantage have also signed a 15-year volume commitment agreement.

As per the agreement, Topaz will earn a fixed natural gas processing fee of $0.66/mcf for a fixed volume of 50 mmcf/d, which is equal to incremental annual cash flow of CAD12 ($8.8m) for the company.

Topaz stated: “The volume commitment fee is payable regardless of actual throughput, and Topaz is not responsible for operating or capital costs for its proportionate share of ownership in the gas plant.”

Advantage will retain the remaining stake in Glacier gas plant

Advantage will continue to hold the remaining 87.5% interest and will retain the operatorship of the Glacier gas plant.

The company will have with access to all surplus capacity during the term of a 15-year volume commitment with Topaz.

Advantage stated: “This transaction fortifies Advantage’s robust balance sheet and augments the Corporation’s ability to execute value-generating capital projects and strategic opportunities.”

Advantage is a Canadian intermediate, natural gas and liquids development and production company with significant operated assets in the Montney resource play in Western Canada.