Canadian energy firm Frontera has agreed to acquire the outstanding shares in Pacific Midstream Ltd.
The move is expected to reduce transportation costs and financial commitments, the company said in a statement.
Frontera will pay $225million in cash over 36 months for the remaining 36.6% of Pacific.
The completion of the transaction is subject to obtaining modifications to Frontera’s take-or-pay contracts, which are expected to reduce tariffs, and other customary conditions of closing.
Following the acquisition, PML will be a 100% consolidated entity of Frontera.
The deal includes picking up stakes in three Latin America focused subsidiaries from Pacific.
Gabriel de Alba, chairman of Frontera, said: “This is a very strategic acquisition for Frontera as we pursue a series of initiatives intended to reduce our corporate transportation costs, provide long term transportation flexibility, and reduce fixed cost transportation obligations.”
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