Parkland Fuel Corp. is buying Chevron Corp.'s Canadian oil refining and marketing business for nearly $1.5-billion, marking yet another big acquisition of foreign-owned energy assets by a domestic player.
Parkland said on Tuesday the deal includes the U.S. oil major's refinery in Burnaby, B.C., 129 service stations in the Vancouver area as well as terminals and a wholesale business that supplies Vancouver's airport. It said the acquisition secures the company's ranking as Canada's largest fuel retailer by site, with 1,800 locations.
Bob Espey, president and chief executive of Alberta-based Parkland, touted the prized locations of the retail outlets, which will continue to operate under the Chevron banner.
"The majority of the assets are in the province of British Columbia and fill in Parkland's national fuel network with a suite of assets complementary to our existing footprint," Mr. Espey said in a conference call.
California-based Chevron said last year that it was exploring a sale of the B.C. operation. The refinery, the largest in the province, has a capacity of 55,000 barrels a day. Over the years, the company has had difficulties securing capacity for the plant's crude oil supply on the Trans Mountain Pipeline. Last year, Ottawa approved a major expansion of the line. The sale does not include Chevron's exploration, oil sands assets or lubricants businesses.
The deal comes after a number of major acquisitions of Canadian energy assets, including those in the oil sands, by domestic players, including Athabasca Oil Corp., Canadian Natural Resources Ltd. and Cenovus Energy Inc. The sellers have included foreign oil companies, such as Norway's Statoil ASA, Royal Dutch Shell PLC and Houston-based ConocoPhillips.
Parkland said it will pay $1.46-billion plus $186-million in working capital for the acquired business. It plans to fund the deal with equity and debt, including a $660-million bought-deal share sale and $768-million from credit facilities.
The deal is the latest for expansion-minded Parkland. It already operates 44 Chevron-branded stations in B.C. Last year, it paid $965-million for the majority of Texas-based CST Brands Inc.'s Canadian business from Quebec-based Alimentation Couche-Tard Inc., including hundreds of gas stations in Quebec and Atlantic Canada.
Mr. Espey said the deal will allow Parkland to expand into areas where it previously had limited exposure, particularly marine and pipeline import and export.