AltaGas is acquiring natural gas processing and storage facilities in Canada from Tidewater Midstream and Infrastructure in a $650m (€440m) deal.

The North American energy infrastructure company said it has agreed to buy the Pipestone Natural Gas Processing Plant Phase I and Phase II expansion project; the adjacent Dimsdale Natural Gas Storage Facility; the Pipestone condensate truck-in/truck-out terminal; and the associated gathering pipeline systems required to operate these assets.

The deal involves TSX-listed AltaGas paying $325m in cash and $325m in AltaGas common shares.

As part of the deal, AltaGas and Tidewater have agreed to create a new joint venture to advance the final steps required to develop and construct the Pipestone Phase II project.

The acquisition strengthens AltaGas’s footprint in the Alberta Montney basin with ”low-risk assets that have long-term growth and provide processing and liquids handling growth that will augment global export expansion” in the coming years, the company said.

Vern Yu, president and CEO of AltaGas, said: “The acquisition is consistent with AltaGas’ long-term strategy and provides us with the opportunity to support industry-leading producers’ growth plans in one of Canada’s most prolific resource plays.

“The assets will deliver highly contracted take-or-pay and fee-for-service revenue that will also bring meaningful long-term LPG supply for AltaGas’ global exports platform.”

Rob Colcleugh, interim CEO of Tidewater, said: “We believe the Transaction unlocks significant value for our shareholders while strengthening our balance sheet to better address opportunities across our diversified portfolio of energy and energy transition infrastructure assets.”

Tidewater said it expects to use net proceeds from the transaction for general corporate purposes, including the repayment of amounts on its senior credit facility.

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