The Canada Pension Investment Board and Wolf Midstream Inc. have signed an agreement to acquire a 50 per cent ownership of a pipeline in northeastern Alberta for $1.4 billion.
Wolf will make the purchase from Devon Energy Corp. with $825 million provided by CPPIB.
The Access pipeline transports blended bitumen and diluent between the Christina Lake area of northeastern Alberta and Edmonton. Under the terms of the transaction, Devon’s thermal-oil acreage is dedicated to the pipeline for an initial term of 25 years.
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In September 2015, Wolf’s management team and the CPPIB created a midstream investment vehicle focused on acquisition opportunities in Western Canada.
“We are pleased to have CPPIB’s full support on this significant transaction for Wolf, reinforcing our mutual commitment to build out the vehicle,” said Gord Salahor, chief executive officer of Wolf.
The transaction is subject to regulatory approvals along with customary terms and conditions. Closing is expected in the third quarter of 2016.