DealBook: BP to Sell Canadian Natural Gas Unit for $1.67 Billion

Chris Ratcliffe/Bloomberg NewsA BP gas station in Romford, England.

LONDON – BP agreed on Thursday to sell its Canadian natural gas liquids business to Plains All American Pipeline for $1.67 billion as BP continues to streamline its operations and bolster its balance sheet.

The cash sale is part of BP’s plan to raise $45 billion by selling assets and businesses to strengthen its finances in the wake of the Gulf of Mexico oil spill disaster last year. BP said it would remain active in Canada.

“Canada remains an important part of our portfolio of growth opportunities to meet North America’s energy needs,” Robert Dudley, BP’s chief executive, said in a statement.

The company has already agreed to sell about $20 billion in assets. In November, BP increased its sales goal to $45 billion, including the disposal of half of its American refining capacity in the Carson and Texas City plants. BP had set aside $40 billion to pay for costs related to the Gulf oil spill.

In November, BP’s $7.1 billion deal to sell a majority stake in the Argentine oil producer Pan American Energy to the Bridas Corporation fell through. Bridas, a joint venture between Bridas Energy of Argentina and Cnooc of China, withdrew its offer because certain conditions were not met.

The Canadian natural gas liquids business, which employs about 450 people, includes plants and storage facilities, BP said. It owns assets that gather, store and distribute natural gas liquids in Canada and the Midwest.

The sale to a Canadian unit of Plains All American Pipeline, which is based in Houston, is expected to be completed by June, subject to necessary government and regulatory approvals. Credit Suisse advised BP on the transaction. Barclays Capital advised Plains All American Pipeline.

“BP’s Canadian N.G.L. business is an asset-rich platform that significantly expands our L.P.G. asset footprint,” Greg L. Armstrong, chairman and chief executive of Plains All American, said in a statement. It is “a supply-based complement to our existing demand-focused business and making PAA one of the largest L.P.G. service providers in North America,” he said.

Article source: http://dealbook.nytimes.com/2011/12/01/bp-to-sell-canadian-gas-group-for-1-67-billion/?partner=rss&emc=rss