AltaGas Ltd. says it may be forced to increase its ownership share in Petrogas Energy Corp., an oil and gas liquids handling firm that owns and operates a propane export terminal in Washington state.
The Calgary-based utility, power and pipeline company says privately held SAM Holdings Ltd. has given notice it will exercise an option that requires an AltaGas-led joint venture to buy SAM’s remaining one-third share in Petrogas at fair market value.
In a news release, AltaGas says it and its joint venture partner, Tokyo-based Idemitsu Kosan Co. Ltd., are evaluating the notice.
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The company says it would expect to fund its portion of the obligation with internal cash flow, the sale of non-core assets and debt.
AltaGas bought its current one-third interest in Petrogas from SAM for about $440 million in 2013 as part of the transaction that allowed Idemitsu to also acquire a one-third share.
The AltaGas-Idemitsu joint venture was formed earlier in 2013 in part to pursue liquefied natural gas export opportunities but shelved its proposed Douglas Channel LNG and Triton LNG projects in B.C. a few years later because of weak market conditions.