Chesapeake Divests Midstream Assets, Tesoro Buys Chevron’s NW Product Pipeline: Energy Biz Update

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On Tuesday Chesapeake Energy Corporation (NYSE:CHK) said that it will divest a substantial majority of its remaining midstream assets to Access Midstream Partners at a price of around $2.16 billion. The assets involved are located mostly in the firm’s Eagle Ford, Marcellus, Utica, Haynesville and Niobrara shale plays. Further, the agreement with Access includes new market-based gathering and processing arrangements that cover various acreage dedication areas; the transaction should close by the end of the year.

Tesoro Corporation (NYSE:TSO) reports that its affiliate, Tesoro Logistics, will acquire Chevron Pipe Line Company’s (NYSE:CVX) Northwest Products System for $400 million. The System consists of the Northwest Product Pipeline, which is a 760-mile Federal Energy Regulatory Commission-regulated common carrier products pipeline which extends from Salt Lake City to Spokane, and a separate five-mile jet fuel pipeline to the Salt Lake City International Airport and the Northwest Terminalling Company comprising the Boise, Pocatello and Pasco, Washington refined products terminals, which are not under FERC regulations. The transaction should to close during the first quarter.

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BHP Billiton Limited (NYSE:BHP) will divest its 8.33 percent stake in the East Browse joint venture and 20 percent interest in the West Browse joint venture, which both lie off the West Australian coast, to PetroChina International Investment. Chief Executive Michael Yeager said that the Browse project interests were a non-strategic asset for the company, which is a mining major. The transaction is expected to close in the first half of next year.

The Voyageur oil sands upgrader project is on a spending hold until Total E&P Canada (NYSE:TOT) and its partner Suncor make a more sweeping decision on the project by the first quarter. Suncor’s Vice President for investor relations Steve Douglas, explained to reporters on Tuesday at the Canadian Association of Petroleum Producers energy conference in Toronto, that “We have acknowledged that economics are challenged, and that’s kind of self-evident in that when the project was first envisioned, it was pre-tight oil boom. With the tight oil boom, it is fair to say, tight oil will compete on price with the upgraded oil sands.”

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