Encana sells two western Canada gas processing plants to Veresen
By EDWARD WELSCH
Encana Corp. said Wednesday it will sell two natural-gas processing plants in Alberta and British Columbia for C$920 million to energy infrastructure company Veresen.
The sale is the last in C$3.5 billion in total assets Encana has sold this year.
Encana, North America's second-largest natural gas producer after ExxonMobil, trimmed back its growth plans and put assets up for sale this year as it faced pressure from persistently low natural gas prices in North America. 
Encana shares jumped on the news, closing up 1.7% to $20.28 on the New York Stock Exchange.
Calgary-based Encana said proceeds from the sale of the natural-gas processing plants in the Cutbank Ridge natural gas fields in Western Canada will be reinvested in natural-gas production, particularly liquids-rich natural-gas production that fetches a higher price.
The Hythe and Steeprock natural-gas processing plants together process up to 516 million cubic feet of natural gas a day and include 230 miles of gathering pipelines.
As part of the sale, which is expected to close in the first quarter of 2012, Encana entered a long-term gathering and processing agreement with Veresen for 370 million cubic feet a day of Encana's existing production in Cutbank Ridge, filling more than two-thirds of the plants' capacity.
Veresen, also based in Calgary, said the plants fit in with its midstream energy growth strategy and that the plants would generate cash flow and profits for the company. It said it secured a C$303 million loan to help finance the purchase.
Encana has been selling its midstream gas processing assets, as well as shale gas production from mature fields. Earlier this year, the Calgary company sold other gas processing plants in Colorado and British Columbia, as well as production assets in North Texas's Barnett Shale field.
Encana has suffered from continued weakness in North American natural-gas prices due to a boom in the unconventional drilling and production techniques it helped to champion. It spun off its oil division two years ago to form Cenovus Energy, and thus hasn't benefitted from more resilient oil prices.
Dow Jones Newswires
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