Conoco Inc., Houston, and its wholly owned subsidiary Conoco Canada Ltd. said Monday that they have completed the acquisition of assets associated with the March agreement to purchase of Petro-Canada's NGL business. The price of the additional asset acquisitions was not disclosed.
Conoco's March acquisition of the NGL business is part of its program to upgrade its portfolio of North American gas processing and gas liquids assets. The associated assets include an 18% nonoperating interest in the Dow Fort Saskatchewan propane-plus fractionator at Edmonton, a 5% nonoperating interest in the Rimbey Pipeline, and a 10% nonoperating interest in the 1,900-mile Cochin Canada pipeline, which stretches from Edmonton through the US Upper Midwest to Sarnia, Ont.
Conoco's NGL acquisition included a 92% operating interest in Petro-Canada's 2.4 billion cfd Empress gas processing plant near Medicine Hat, Alta.; the 580-mile Petroleum Transmission Co. pipeline from Empress to Winnipeg, Man.; six related pipeline terminals; and a storage facility. The Empress plant has an NGL production capacity of 48,000 b/d.
The NGL acquisition creates a shift from "a midstream business of scattered assets" in mature basins towards a more profitable business built on centralized, large-scale processing systems, said Mike L. Johnson, vice-president and general manager of Conoco's natural gas and gas products business unit. The deal increases Conoco's total net gas liquid production in Canada, the US, and Trinidad by 65% to 105,000 b/d and triples net processing capacity to 3.4 billion cfd while reducing per-barrel overhead and operating costs by 24%, Johnson said.
Previously, Conoco sold midstream properties in Oklahoma and West Texas, and in late 1999 it acquired natural gas producing properties from Canada-based Renaissance Energy Ltd. That acquisition doubled Conoco Canada's daily gas production and increased proven gas reserves by 60%.