Quicksilver Resources Inc., through wholly-owned subsidiaries, and Kohlberg Kravis Roberts & Co. L.P. (KKR) announced the formation of a new midstream partnership dedicated to the construction and operation of natural gas midstream services to support producer customers in British Columbia and the Northwest Territories of Canada.
Transaction Highlights :
Strategic Relationship
The creation of this midstream partnership is strategic to the continued development of the Horn River Asset for Quicksilver as it allows for an economic path to market. This is the second step in ensuring the lowest cost solution relative to current options to move Quicksilver’s gas to market. The first step was TCPL’s extension of their Alberta system to Quicksilver lands. The treating facility that KKR will fund will be at the terminus of this pipeline. This alternative enhances the return on Horn River gas by reducing the cost of processing and transporting our gas to AECO.
“ With its well-established and versatile energy business, KKR is an ideal partner in creating a low-cost and reliable solution for processing and transporting natural gas produced from the Horn River Basin for Quicksilver and other producers. It will facilitate the sale of natural gas to multiple markets in North America and ultimately to export markets in Asia ,” said Toby Darden, Chairman of the Board of Quicksilver . “ Moreover, the partnership structure will further strengthen our financial flexibility while reducing our expected capital requirements over the next several years .”
“ KKR is excited to partner with Quicksilver to provide the capital needed to bring the substantial resources in the Horn River to market ,” said Fred Goltz, a Member at KKR . “ We look forward to growing our commitment to this partnership over time as the company accelerates its activity in the play .”
The wells in the Horn River Basin of British Columbia are among the most prolific of shale plays in North America. We believe recoverable reserves from Quicksilver’s acreage alone could exceed 10 trillion cubic feet (Tcf) of natural gas. According to a recent Canadian National Energy Board study, Horn River Basin reserves could exceed 75 Tcf.
[mappress] LNG World News Staff, December 28, 2011