Centrica plc, the U.K.-based parent company of Direct Energy, partnered with Qatar Petroleum to buy $1 billion in natural gas and crude oil assets in western Canada Monday from Suncor Energy. Direct Energy will now own the production assets to supply 60% of its retail gas customers in North America. Currently, they provide 20% of its own gas. Centrica will operate the business, which is subject to regulatory approval of the Canadian government.
The $1-billion deal is the largest Centrica has ever done in North America. Centrica “wanted Suncor’s conventional properties because they are legacy assets and it believes technology such as multistage horizontal fracturing can improve the wells’ production,” said Wes Morningstar, a Calgary-based senior vice-president with the company, when speaking to The Globe and Mail.
Badar Kahn, CEO of Direct Energy, told the Houston Business Journal, “It [the acquisition] put us in a great footing to carry on growing our business in North America with the confidence that we’re managing the risks in the wholesale market.”
This post was derived from coverage in the Houston Business Journal and The Globe and Mail.