By OGJ editors
HOUSTON, Apr. 10 -- A trio of major oil companies agreed to sell their 200,000 b/d Rainbow oil pipeline in northern Alberta to a subsidiary of Plains All American Pipeline LP for $540 million (Can.).
Imperial Oil Ltd., ExxonMobil Corp., and Royal Dutch Shell PLC each own a third of the pipeline that extends 781 km from Zama in northwest Alberta to Edmonton, connecting to the major oil artery between Canada and the US Midwest operated by Enbridge Inc. It's also linked to Kinder Morgan Canada's TransMountain line to the West Coast and refineries in the Edmonton region.
The deal is expected to close during the second quarter, subject to regulatory approval. Plains All American expects it to add to cash flow within 6 months of closing. The Houston oil transportation company also will buy 1.1 million bbl of oil line fill at a cost based on market prices at closing. That acquisition would be worth $120 million (Can.) at current prices.