By Tanay Dhumal
(Reuters) -Canada's AltaGas on Thursday agreed to buy some natural gas assets from Tidewater Midstream and Infrastructure for C$650 million ($480 million), in a bid to strengthen its midstream operations.
The deal, expected to close in the fourth quarter, will also bring meaningful long-term supply of liquefied petroleum gas (LPG) for AltaGas' global exports platform, newly appointed CEO Vern Yu said in a statement.
It is expected to boost the company's earnings per share slightly in 2024 and then by 5% from 2025.
"AltaGas has established a strong foothold to capitalize on the natural gas liquids market and complete a strong infrastructure platform for producers," said Longdley Zephirin of brokerage The Zephrin Group.
Alberta-based AltaGas has been striving to expand its midstream business, which involves processing, storing, transporting and marketing oil, natural gas, and natural gas liquids.
In April, it formed a joint venture with Dutch tank storage company Royal Vopak to develop an LPG and bulk liquids terminal in British Columbia.
Analysts said the deal with Tidewater would help both companies build on a midstream partnership inked in 2016, when Tidewater bought natural gas gathering and processing plants from AltaGas.
Under the new agreement, AltaGas will buy the Pipestone Natural Gas plant, Dimsdale natural gas storage facility and the associated pipeline systems required to operate these assets.
Shares of Tidewater jumped 6.2% to C$1 and AltaGas was up 0.7% at C$26.49 in morning trade.
($1 = 1.3542 Canadian dollars)
(Reporting by Tanay Dhumal in Bengaluru; Editing by Devika Syamnath)