Hurricane will not proceed with purchase of CPC partnership interest

Hurricane Hydrocarbons Ltd. said that its deal to purchase an interest in the Caspian Pipeline Consortium (CPC) from Amoco Production Co., a unit of BP PLC, has been terminated.

June 18, 2002

2 min read

By OGJ editors

HOUSTON, June 18 -- Hurricane Hydrocarbons Ltd. said that its deal to purchase an interest in the Caspian Pipeline Consortium (CPC) from Amoco Production Co., a unit of BP PLC, has been terminated. Conditions of the sale and purchase agreement were not shored up by the June 13 deadline, Calgary-based Hurricane said.

"The agreement could not be completed because certain approvals of the CPC shareholders could not be obtained within the applicable time limits," Hurricane explained.

As a consequence, BP said it would return by June 22 Hurricane's initial $40 million payment for an interest in the pipeline consortium.

Last year, Hurricane entered into a heads of agreement with the BP unit to acquire a stake in the pipeline project, which was to be held through Kazakhstan Pipeline Ventures LLC, for $100 million (OGJ Online, Nov. 29, 2001). Hurricane is a Canadian independent that produces nearly 100,000 b/d from several fields west of Kumkol in the South Torgay basin, 600 miles east of the Caspian pipeline's nearest point.

Hurricane said that the completion of CPC, expected for yearend, would fundamentally improve the competition dynamics between export routes in favor of Kazakh producers. Also, Hurricane said it would benefit from such competition even not owning an interest in CPC.

Hurricane said it would "actively pursue becoming a third-party shipper in CPC together with other export options already used or being explored."