LEXPERT MAGAZINE
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JANUARY 2019 13
Fasken Martineau DuMoulin LLP
advised NST on all aspects of this trans-
action. e deal was led by Johanna Fipke
and included Andrew Gabrielson, Steven
Catania, Sarah Martin, Sarah Cuddy and
Fergus McDonnell. Stoel Rives LLP was
local US counsel to NST.
DLA Piper (Canada) LLP acted as
legal adviser to SMM/SC. e DLA Piper
Canada transaction team was led by David
Reid, Global Co-Chair of DLA Piper's
Mining Group, and included Ruby Chan,
Don Collie, Mike Megalli, Brent Mac-
Lean, Kevin Wright, and Peter Li. Dorsey
& Whitney LLP was local US counsel to
SMM/SC.
Oil & Gas Oil & Gas
INTER PIPELINE LTD.
DIVESTS THE HEARTLAND
PETROCHEMICAL COMPLEX'S
CENTRAL UTILITY BLOCK TO
FENGATE CAPITAL MANAGEMENT
CLOSING DATE: SEPTEMBER 25, 2018
On September 25, 2018, Inter Pipeline Ltd.
("Inter Pipeline") completed its divestiture
of the Heartland Petrochemical Complex's
Central Utility Block ("CUB") to Fengate
Capital Management ("Fengate"), a pri-
vately held infrastructure and real estate
investment firm.
Under the terms of the sale, Inter Pipe-
line will recover all of its development cap-
ital and Fengate will assume responsibility
for funding the CUB capital cost, currently
estimated at $600 million.
Fengate has also entered into long-term
agreements to supply core utilities to Inter
Pipeline's Heartland Petrochemical Com-
plex in exchange for structured capital
and operating recovery fee payments from
Inter Pipeline.
e CUB is a 102 MW natural gas-pow-
ered cogeneration facility capable of sup-
plying Inter Pipeline with electricity, steam
and other key utilities for its 100% owned
Heartland Complex near Edmonton.
e $3.5 billion complex, which excludes
the CUB capital cost, consists of integrated
propane dehydrogenation and polypropyl-
ene plants. e complex will convert locally
sourced, low-cost propane into 525,000
tonnes per year of polypropylene pellets.
Construction of the Heartland Complex
is in progress with completion scheduled
for late 2021.
With the sale of the CUB to Fengate,
Inter Pipeline recovered approximately $50
million of development capital incurred to
date in a lump sum closing payment.
Fengate is responsible for funding the
remainder of the CUB capital cost on an
ongoing basis.
Fengate has engaged Inter Pipeline to
manage the construction of the CUB and
the day-to-day operations of the facility
once in service.
is helps ensure that the CUB, which
will be highly integrated with the Heart-
land Complex, will be managed safely and
efficiently for the long-term benefit of both
Fengate and Inter Pipeline. When in ser-
vice, the capital fee paid to Fengate will be
adjusted upward or downward based on
final construction costs.
e CUB is expected to be in service by
mid-2021 to provide utilities for the com-
missioning of the Heartland Complex.
e senior secured, non-recourse pro-
ject financing for the acquisition and sub-
sequent construction was provided by a
syndicate of lenders consisting of MUFG
Bank, Ltd., Canada Branch; Sumitomo
Mitsui Banking Corporation, Canada
Branch; Canadian Imperial Bank of Com-
merce; National Bank of Canada; Mizuho
Bank, Ltd.; Siemens Financial Ltd.; Metro-
politan Life Insurance Company; and
Sumitomo Mitsui Trust Bank, Limited,
New York Branch.
Inter Pipeline was represented internally
by Kent Chicilo, Associate General Coun-
sel, with a team including Kristen Simp-
son, Senior Legal Counsel and Jennifer
Asquin, Legal Counsel. Torys LLP acted
as counsel to Inter Pipeline, with a team
including Chris Christopher, Ian Gordon,
Carla Hunt, Jessie Mann, Carleigh Ken-
nedy and Tanis Makowsky (Energy and
Infrastructure), Kevin Fougere (Finance),
Andrew Bedford (Real Estate), Craig Mau-
rice (Tax), David Wood (Litigation), Tyson
Dyck (Environmental), and Lou Cusano
and Evan Dickinson (Regulatory).
Fengate was represented internally by
Vernita Tsang, Vice President, Legal. Davies
Ward Phillips & Vineberg LLP acted as
counsel to Fengate, with a team including
William Buchner, Anthony Spadaro and
Angela Susac (Energy and Infrastructure),
Sarah Powell (Environmental and Regu-
latory) and Pawel Mielcarek (Real Estate).
McLennan Ross LLP acted as Alberta
local counsel, with a team including Doug
Evanchuk and Adrian Sherman (Real Es-
tate) and JoAnn Jamieson (Regulatory).
e Lenders were represented by a team
from McCarthy Tétrault LLP, comprised
of Stephen Furlan (Team Lead), Seán
O'Neill (Power), Kerri Lui, Lynn Parsons,
and Taha Qureshi (Financial Services),
Scott Chalmers (Construction), Kimber-
ly Howard (Environmental and Regula-
tory), Candace Pallone (Derivatives), and
Mark Christensen and Elizabeth Rafferty
(Real Estate).
Oil & Gas Oil & Gas Oil & Gas
AKITA DRILLING LTD. AND XTREME
DRILLING CORP. CLOSE STRATEGIC
BUSINESS COMBINATION
CLOSING DATE: SEPTEMBER 11, 2018
AKITA Drilling Ltd. ("AKITA") acquired
all of the issued and outstanding common
shares of Xtreme Drilling Corp. ("Xtreme")
by way of a Plan of Arrangement.
Xtreme shareholders were able to elect to
receive 0.3732394 of a Class A non-voting
share of AKITA or $2.65 in cash for each
Xtreme common share held, or a combin-
ation thereof, in each case subject to prora-
tion as determined by a cash maximum and
a share maximum.
Bennett Jones LLP was Canadian coun-
sel to AKITA Drilling Ltd. with a team led
by William Osler and including Kahlan
Mills, Kay She (M&A/Corporate), Jeremy
Russell and Taylor Davis (Financial Servi-
ces). Vinson & Elkins LLP were US coun-
sel to AKITA. AKITA was provided tax
counsel by Brent Perry, Byron Beswick and
Erica Hennessey of Felesky Flynn LLP.
Xtreme was represented by Bradley
Squibb, Bradley Ashkin, Haifeng Hu, Rhon-
da Parhar (Corporate) and Kevin Guenther
(Tax) of Stikeman Elliott LLP.
