Texas-based Quicksilver Resources said today it will create a new midstream partnership with Kohlberg Kravis Roberts to support customers in British Columbia.
As part of the agreement, Quicksilver will contributed an existing 20-mile, 20-inch gathering line and compression facilities and 10-year contracts for gas deliveries. KKR, which will hold a 50 percent stake in the partnership, will pay Quicksilver $125 million as part of the deal.
Both companies will jointly build and operate natural gas gathering, transportation and processing infrastructure to help spur development of the Horn River Basin in British Columbia.
Horn River Basin is estimated to have 10 trillion cubic feet of recoverable natural gas, and a Canadian National Energy Board study put the number as high as 75 trillion cubic feet.
“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.”