Under an agreement, 65% of Husky Energy Inc.’s ownership interest in select midstream assets in the Lloydminster region of Alberta and Saskatchewan will be sold to Cheung Kong Infrastructure Holdings Ltd. and Power Assets Holdings Ltd. (PAH) .

There are about 1,900 kilometers of pipeline in the Lloydminster region, 4.1 million barrels of oil storage capacity at Hardisty and Lloydminster, and other ancillary assets. A new limited partnership will be formed of which Husky will own 35%, Cheung Kong Infrastructure 16.25% and PAH 48.75%.

Husky will receive CA$1.7 billion of gross cash proceeds, will have a 35% interest in the assets and will remain operator. The sale price represents about 13x the expected 2016 EBITDA of about CA$180 million.

The partners will expand Husky's heavy oil business and build the midstream infrastructure requirements associated with the planned construction of additional Lloyd thermal projects in Saskatchewan and Alberta.

The transaction is subject to regulatory approval.

RBC Capital Markets and HSBC Securities (Canada) Inc. were Husky’s financial advisers, and Torys LLP was Husky’s legal adviser.

A committee of independent directors appointed by Husky’s board to review and assess the transaction was advised by BMO Capital Markets. Osler, Hoskin & Harcourt LLP was legal adviser.

Husky Energy Inc. is based in Calgary, Alberta.