Husky Energy Inc. said July 18 it created a new midstream LP after jettisoning part of its stake in select midstream assets in the Lloydminster region of Alberta and Saskatchewan.

Husky retained a 35% interest and will remain operator through the new subsidiary, Husky Midstream LP. The assets include about 1,900 km of pipeline, 4.1 million barrels of oil storage capacity and other ancillary assets.

The buyer, Cheung Kong Infrastructure Holdings Ltd. and Power Assets Holdings Ltd. (PAH), paid C$1.7 billion (US$1.3 billion) for a 65% ownership interest in Husky Midstream. Cheung Kong has a 16.25% interest in the partnership and PAH has a 48.75% interest.

Husky Midstream will facilitate the expansion of the Canadian company's heavy oil thermal business, the release said. Financing has been secured for investment in new infrastructure to expand takeaway capacity for at least eight new Lloyd thermal projects.

The partnership also allows for the expansion of its third-party transportation business, according to the release.

The sale was announced April 25. The transaction received regulatory approval early July. Proceeds from the sale will be used to strengthen the Husky's balance sheet.