CALGARY – Energy transportation and storage firm Keyera Corp. (TSX:KEY) said Thursday it has agreed to buy gasoline blending component producer Alberta EnviroFuels from Chevron Standard Ltd. and Neste Canada Inc. for US$198 million.
Alberta EnviroFuels makes iso octane, a gasoline blending component derived from butane, which is a derivative of the natural gas liquids Keyera distributes.
“We are experienced operators of large facilities and have a successful track record marketing energy products across North America,” chief executive Jim Bertram said in a statement.
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“AEF is a world-class asset and the personnel joining our team will be a great addition to our organization.”
The deal will gain Keyera a 13,600 barrel per day manufacturing facility – the largest iso-octane manufacturing facility in the world – near its Edmonton terminal and sales agreements with major refiners. It is already connected to Keyera’s Edmonton terminal, through which it receives the primary feedstock butane.
Alongside the purchase, the Calgary-based company will also get multi-year agreements with Chevron and its affiliates.
The transaction is subject to closing adjustments, plus working capital estimated at US$50 million, and is expected to close in early 2012.
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