Chevron inks deal to shed Canadian downstream assets

Chevron Canada Ltd. (CCL) has agreed to sell its Canadian refining, retail, commercial, and wholesale fuel businesses to Calgary-based Parkland Fuel Corp., Canada's largest independent marketer of fuel and petroleum products.

Chevron Canada Ltd. (CCL) has agreed to sell its Canadian refining, retail, commercial, and wholesale fuel businesses to Calgary-based Parkland Fuel Corp., Canada's largest independent marketer of fuel and petroleum products.

As part of the deal Parkland will pay about $1.46 billion (Can.) in cash plus an estimated $186 million (Can.) in working capital for 100% ownership interest in Chevron Canada R&M ULC, which operates the entirety of Chevron’s integrated Canadian downstream assets, Parkland said.

In addition to Chevron’s 55,000-b/d refinery in Burnaby, BC, Parkland will acquire the following:

• Three fuel terminals located in Burnaby, Hatch Point, and Port Hardy, BC.

• An aviation business serving Vancouver International Airport.

• 129 Chevron-branded retail service stations mainly located in Vancouver.

• Three marine fuel service stations in Vancouver.

• 37 cardlock stations across British Columbia and Alberta.

Parkland said the proposed Chevron acquisition comes as part of a broader strategy to strengthen its existing supply-focused business model as well as complements its previously announced agreement to purchase the majority of Alimentation Couche-Tard Inc. subsidiary CST Brands Inc.’s Canadian fuel business in a deal scheduled to close by the end of this year’s second quarter.

Parkland, which will retain the Burnaby refinery’s existing key management personnel, also will move forward with a major turnaround of the plant scheduled for first-quarter 2018. At a projected cost of $100 million (Can.), the 8-week turnaround will include routine scheduled maintenance as well as upgrades to unidentified operating units.

With planning for the turnaround now well under way, Parkland said key personnel involved in the project will transition with the refinery purchase.

Pending customary third-party consents and standard regulatory approvals, Parkland expects to close on its acquisition of CCL’s downstream assets in fourth-quarter 2017, the company said.

Contact Robert Brelsford at rbrelsford@ogjonline.com.

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