Nova sells ethane pipeline
23 Nov 2004
NOVA Chemicals has reached an agreement to sell its interest in the Alberta Ethane Gathering System (AEGS) in Canada to Fort Chicago Energy Partners (Fort Chicago).
Net cash proceeds from the sale and related agreements will total approximately $78 million. The transaction is expected to close by the end of the year.
"This transaction not only fits our business strategy but also generates a significant amount of cash that we will use to maximise shareholder returns," commented Jeffrey M. Lipton, President and Chief Executive Officer of NOVA Chemicals. "We are fortunate that the market for assets like the Alberta Ethane Gathering System has been strong while the Canadian dollar hit new highs."
AEGS is a 1,324km ethane pipeline system which delivers virtually all of the ethane feedstock requirements for the Joffre, Alberta ethylene facilities of NOVA Chemicals and Dow Chemical Canada and approximately 50% of the ethane feedstock requirements for Dow Chemical's ethylene facilities located at Fort Saskatchewan, Alberta.
NOVA Chemicals will continue to transport ethane as one of several shippers on AEGS under its existing long-term ethane transportation agreement and will physically operate and maintain AEGS under a contract with Fort Chicago.
Closing of the sale of NOVA Chemicals' interest in AEGS and related sales agreements are subject to customary regulatory and other approvals.
