AltaGas under pressure to increase ownership in Petrogas
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.
The company told Canadian Press 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.