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Tidewater Midstream selling cogeneration units at Pipestone gas plant for C$85M

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Tidewater Midstream selling cogeneration units at Pipestone gas plant for C$85M

Calgary, Alberta-headquartered Tidewater Midstream and Infrastructure Ltd. agreed to sell 32 MW of cogeneration units, totaling 32 MW, at its Pipestone gas plant to Kineticor Resource Corp. for C$85 million.

Along with this divestment, Tidewater Midstream agreed to pay fixed payments to Kineticor in exchange for supply power to the Pipestone gas plant upon its completion, according to a March 25 news release. The plant, which remains on budget, is expected to be commissioned in the third quarter of 2019.

The company maintained its guidance of C$30 million to C$35 million adjusted EBITDA contribution from the plant. Expected adjusted EBITDA contribution is based on approximately 100 MMcf/d of contracted volume at market rates.

Tidewater Midstream plans to use portion of the sale proceeds to begin scoping additional sour gas processing, natural gas storage and liquids handling capacity at Pipestone. Remaining proceeds will be used to fund Tidewater's ongoing capital program through 2019.