BP Considers Sale of Canadian Natural Gas Liquids Unit

BP said on Wednesday it was examining the possible sale of its Canadian natural-gas liquids business as it seeks to raise up to $30 billion to pay for its Gulf of Mexico oil spill.

The assets, which include pipelines and processing stations that remove valuable crude-like liquids from gas, could fetch $2 billion, a Bloomberg report said, although one industry source said this figure was on the high side.

"BP has decided to prepare its natural-gas liquids business for a possible sale," a spokeswoman at BP's Canadian unit said, adding that any proceeds are pegged to go toward paying for costs arising from the spill.

The assets BP is putting up for sale include the 4.6 billion cubic feet a day Empress fractionation plant on the Alberta-Saskatchewan border, and other plants in Fort Saskatchewan, Alberta, and Sarnia, Ontario.

The plants are expected to attract the interest of a number of companies already operating natural gas processing facilities in Canada, a list that includes Spectra Energy, William Companies, Provident Energy Trust and others, Steven Paget, an analyst at FirstEnergy Capital said.

"It's a great business and the economics are excellent now," he said.

Natural-gas liquids like ethane, propane and condensates are stripped out of natural gas by fractionation plants. Because they are priced in relation to oil, producing NGLs is now more profitable than producing gas, whose price has stagnated on weak demand and high supplies.

Once Canada's dominant natural-gas producer, BP in July sold its natural-gas business in Western Canada to Apache Corp as part of a $7 billion deal to raise funds for spill costs.

If the sale is completed, BP's Canadian business would be concentrated on oil sands projects with Husky Energy and Devon Energy Corp, as well as exploration land in the Beaufort Sea off Canada's Arctic Coast.

Credit Suisse is advising BP on the planned sale, sources familiar with the matter said.