CALGARY — A year after putting its European bulk liquid storage business on the block, Inter Pipeline Ltd. has signed a deal to sell most of it to the Madrid-based CLH Group for $715 million.
The sale includes all of the Calgary-based company's bulk liquid storage and handling assets in the United Kingdom, Ireland, the Netherlands and Germany.
"Monetizing a significant portion of our European asset base enables us to focus resources on developing our higher growth Canadian businesses," Inter CEO Christian Bayle said in a news release Tuesday.
"As such, proceeds from the sale will be used to reduce debt, strengthen our balance sheet and assist with financing our large capital expenditure program, including the Heartland Petrochemical Complex."
CLH chairman Jose Luis Lopez de Silanes said the deal will make the company the industry leader in Europe with operations in eight countries.
“This agreement represents a unique opportunity to continue the company’s international expansion and consolidate its presence in the European market," he said in a statement.
The purchase includes 11 U.K. terminals plus two in Germany and one terminal in each of Ireland and the Netherlands with a combined storage capacity of about 18 million barrels.
Inter said it will keep its eight terminals in Sweden and Denmark with 19 million barrels of aggregate storage capacity.
Inter bought six of its terminals in the United Kingdom and the one in Amsterdam in the fall of 2018 for $354 million in a deal with Texas-based NuStar Energy.
In May, Inter warned the cost of building its Heartland complex under construction near Edmonton had risen by about half a billion dollars to about $4 billion and its in-service date may be delayed to early 2022 from late 2021 due to factors including the COVID-19 pandemic.
The facility is designed to to convert abundant Alberta propane into polypropylene plastic pellets for export to manufacturers.
The CLH deal is expected to be completed in the fourth quarter, subject to closing conditions and regulatory approvals.
This report by The Canadian Press was first published Sept. 22, 2020.
Companies in this story: (TSX:IPL)
Dan Healing, The Canadian Press