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Husky Energy closes C$1.7B deal to drop down midstream assets into new partnership

Husky EnergyInc. has closed a C$1.7 billion transaction to drop down selectmidstream assets in the Lloydminster region of Alberta and Saskatchewan into anew limited partnership.

The Calgary, Alberta-based Husky Midstream LP will assumeownership of assets that include about 1,900 kilometers of pipeline, 4.1million barrels of oil storage capacity and other ancillary assets. Husky Energy retains a 35% interestin the partnership and will remain as operator of the assets.

The partnership will facilitate the expansion of HuskyEnergy's heavy oil thermal business, given that financing for investment in newinfrastructure to expand takeaway capacity for at least eight new Lloyd thermalprojects has been secured, according to a July 18 news release. This will alsoallow the partnership opportunity to expand its third-party transportationbusiness.

Cheung Kong Infrastructure Holdings Ltd. has a 16.25% interestin the partnership while Power Assets Holdings Ltd. owns 48.75% interest.