Paramount Resources has signed an agreement to sell Musreau Complex and related midstream assets to a wholly-owned subsidiary of Pembina Pipeline for $600m.
The assts considered for the sale include the 50 million cubic feet per day (MMcf/d) refrigeration plant, the 200 MMcf/d deep cut plant, the 22,500 million barrel per day (bbl/d) condensate stabilizer, the amine facility and the gas sales pipeline connecting the Musreau Complex to the TCPL meter station.
Additional assets include the majority of Paramount’s larger-diameter gathering system in the Musreau area as well as site and engineering and design work for the future 6-18 gas processing plant.
Pembina also agreed to optimize existing transportation arrangements to meet Paramount’s anticipated production growth.
The deal is expected to add 250 mmcf/d of processing capacity one of in Pembina’s its core areas.
Paramount president and CEO Jim Riddell said: "We have eliminated our future midstream funding requirement for the growth and development of our significant resources in the area, while maintaining the option to call for additional processing capacity."
Paramount also signed a midstream service agreement with Pembina to include a 20-year arrangement that secures Paramount priority access to the sold capacity at the Musreau complex.
Pembina gas services vice-president Jaret Sprott said: "The acquisition of these assets strengthens Pembina’s strategic positioning in one of our core areas, supported by some of the most economic resource plays in North America.
"The combination of Pembina’s large-scale integrated value chain and Paramount’s substantial Montney and Cretaceous land position, creates significant opportunities for future infrastructure development."
Proceeds from the transaction will be used to reduce the company’s bank credit facility.
Scheduled to be completed in the second quarter of 2016, the transaction is subject to regulatory approvals and customary closing conditions.