Encana has agreed to sell several natural gas gathering and compression assets supporting Montney development in the Dawson area of northeastern British Columbia, Canada, to Veresen Midstream Limited Partnership (Veresen Midstream).
Veresen Midstream is a 50/50 limited partnership of Veresen and affiliates of Kohlberg Kravis Roberts & Co (KKR).
Encana will receive about C$412m ($354m) from the sale and actual costs accrued in 2015.
The transaction includes a 500km pipeline and 675 million cubic feet per day of compression facilities.
Veresen Midstream will offer gathering and compression services to Encana and Cutbank Ridge Partnership, its partnership with a Mitsubishi unit, for a fee.
Veresen Midstream has agreed to undertake up to C$5bn of new midstream expansion to support development within the Montney.
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By GlobalDataEncana, along with the CRP, plans to invest between $600m to $700m in the play in 2015.
The transaction, which is subject to regulatory approval, is expected to be completed in the first quarter of 2015.
Encana executive vice-president of midstream, marketing & fundamentals Renee Zemljak said: "We are unlocking value from our midstream infrastructure that we can redirect to strategic upstream opportunities while ensuring reliable, efficient midstream service to support our ongoing operations and development in the Montney."
Veresen Midstream will be Veresen’s primary growth vehicle for its Canadian natural gas and natural gas liquids midstream business.
