Tidewater Midstream announced Friday its intention to buy Husky Energy's refinery in Prince George for $215 million.
Tidewater says the light oil refinery, which produces diesel and gasoline, will expand its liquids value chain, and is a critical piece of infrastructure in a region in short supply of refined products.
"Regional demand is robust and short supply of refined product, having historically been driven by local energy intensive industries including forestry, mining and oil and gas," the company said in a news release.
"Tidewater expects demand to continue to be strong as various large-scale infrastructure projects are developed in B.C."
The two Calgary-based companies say the refinery's employees will be retained after the deal closes. Tidewater may also pay up to an additional $60 million over two years under certain contingencies.
The refinery uses crude oil and condensate from B.C. and Alberta to produce about 12,000 barrels per day of low-sulphur gasoline and diesel fuel.
Husky will buy 90% of the refinery's diesel and gasoline capacity for five years, with prices subject to review, to supply its Husky retail gasoline stations and Husky retail partners.
The sale is part of Husky's plan to focus on a series of physically linked assets in Western Canada as well as its offshore oil and gas production off Canada's East Coast and in the Asia-Pacific region.
Husky said Friday that it continues to conduct a strategic review of its retail and commercial fuels businesses.
-- with files from the Canadian Press
