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Husky Energy reaches agreement to sell Prince George Refinery

The sale includes $250 million in cash
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The Husky Energy Prince George Refinery. (via Husky Energy)

Husky Energy has sold one of its Prince George assets according to the company. 

Husky announced today (Oct. 4) they have reached an agreement for the sale of the Prince George Refinery to Tidewater Midstream and Infrastructure.

The sale is for $215 million in cash plus a closing adjustment for inventory and a contingent payment of up to $60 million in two years. 

The company had announced back on Jan. 9 they were considering the sale of the refinery.

Husky was considering the sale to focus on its Integrated Corridor and Offshore businesses which is a series of physically-linked assets that includes upstream thermal crude production, storage, committed pipeline capacity and refineries.

“We continue to deliver on Husky’s five-year plan outlined at our Investor Day in May, with an ongoing focus on capital discipline, consistent execution and increased margins,” said CEO Rob Peabody in a press release. “The plan is aimed at further enhancing the resiliency of the company.”

Money from the sale will be used in accordance with Husky's funding priorities which they say includes maintaining the strength of the balance sheet and returning value to the shareholders. 

Tidewater is keeping all refinery staff. 

The transaction is expected to close in the fourth quarter of 2019 and is subject to regulatory approvals.

The Prince George refinery is a 12,000 barrel-per-day facility that processes light oil into low-sulphur gasoline and ultra-low sulphur diesel along with other products. 

Husky says as a part of the announced sale, they will enter into a five-year offtake agreement with Tidewater for refined products from the Prince George Refinery.