CALGARY, AB, March 11, 2021 /CNW/ - Tidewater Midstream and
Infrastructure Ltd. ("Tidewater" or the "Company") is
pleased to provide an update on various renewable energy
initiatives it has been undertaking over the past 6-12 months.
These initiatives include opportunities in renewable diesel,
co-processing, renewable hydrogen, blue hydrogen, renewable natural
gas, carbon capture, and other various renewable energy projects
(together the "Renewable Initiatives").
Renewable Diesel and Renewable Hydrogen Project
Tidewater's largest current Renewable Initiative is a 3,000
barrels per day renewable diesel and renewable hydrogen complex
located on the site of Tidewater's existing Prince George Refinery
in BC (the "PGR"), for an estimated total project cost of
$215 to $235
million. The renewable diesel and renewable hydrogen complex
will be a stand-alone renewables complex focused on 100% renewable
feedstock and will include a pretreatment facility to provide
Tidewater significant flexibility on running various renewable
feedstocks. Tidewater has received BC government commitments of
approximately $100 million in the
form of BC Low Carbon Fuel Standard Credits (based on the current
market value) for the construction of the complex, representing
approximately 45% of the mid-point total project cost of
approximately $225 million.
Project funding is predicated on management's current estimate of
the asset generating over $75 million
of EBITDA in its first year of operations, which is
anticipated as early as 2023, and excludes any incremental EBITDA
upside from hydrogen production and the credit value associated
with the Canadian Clean Fuel Standard. The consumer use of the
produced renewable diesel and renewable hydrogen is expected to
reduce carbon intensity and related GHG emissions by approximately
80-90% and 65-75% respectively, versus conventional diesel which
represents the equivalent of removing approximately 70,000 – 80,000
vehicles from the road annually. Tidewater is working through
additional means to further reduce the carbon intensity of the
renewable diesel to be produced.
Co-Processing Projects
Tidewater is completing a canola co-processing project for
approximately $10 million in capital,
that is expected to commence operations in the fourth quarter of
2021 and is currently estimated to generate over $5 million of EBITDA per year. Tidewater also
expects to complete a Fluid Catalytic Cracking ("FCC")
co-processing project at the PGR, for an approximate $10 million in capital, during the next scheduled
refinery turnaround in the Spring of 2023. Project funding of
the FCC co-processing project is predicated on management's current
estimate of the asset generating over $5
million of annualized EBITDA once it commences operations.
Both co-processing projects have received material BC government
support in the form of BC Low Carbon Fuel Standard credits that
significantly reduce Tidewater's net capital contribution. The
renewable diesel and renewable gasoline produced by the
co-processing projects will have a carbon intensity of
approximately 80-90% less than conventional fuels.
Tidewater is grateful to have received early support from the
Provincial and Federal governments on these various opportunities.
Tidewater's existing assets in BC and Alberta provide the Company with a strategic
advantage in relation to the increasing federal carbon tax,
Canadian Clean Fuel Standards credits, and BC Low Carbon Fuel
Standard credits.
Tidewater is also pursuing other Renewable Initiatives that are
at various stages of development. These initiatives are
expected to increase the size and scale of the company's renewable
portfolio, and to concurrently add to EBITDA with attractive
investment returns.
"We are pleased and excited at Tidewater to continue our effort
in carbon reduction through the development of our Renewable
Initiatives," said Joel MacLeod,
Tidewater Chairman and Chief Executive Officer. "The support shown
by the BC and federal governments has been tremendous and we are
thankful for the confidence they placed on our renewable energy
projects."
"Tidewater's renewable energy initiatives show BC's Low Carbon
Fuel Standard in action. Credits from the program are supporting
projects that will lead to the production of more renewable fuels,
while generating new jobs and economic opportunities from BC's
resources," said Bruce Ralston,
Minister of Energy, Mines and Low Carbon Innovation. "Fuel
suppliers have a vital role to play in our government's plans to
reduce greenhouse gas emissions from transportation fuels and
achieve our climate targets. I applaud Tidewater's efforts and
investments to advance these innovative projects."
Tidewater continues to evaluate options to fund its Renewable
Initiatives without incurring additional corporate indebtedness,
with the Company's primary objective remaining to deleverage
through 2021.
In connection with these efforts, Tidewater has engaged CIBC
Capital Markets and National Bank Financial Inc. as financial
advisors to assist the Company in understanding the available
external financing alternatives to further advance the Renewable
Initiatives in an accretive and deleveraging manner.
Cautionary Notes
Advisory Regarding Forward-Looking Statements
Certain statements in this news release are "forward-looking
information" within the meaning of applicable Canadian securities
legislation ("forward-looking statements"). Such forward-looking
statements relate to possible events, conditions or financial
performance of the Company based on assumptions about future
economic conditions and courses of action. All statements other
than statements of historical fact are forward-looking statements.
In some cases, forward-looking statements can be identified by
terminology such as "anticipate", "believe", "continue", "could",
"estimate", "expect", "forecast", "intend", "may", "objective",
"ongoing", "outlook", "potential", "project", "plan", "should",
"target", "would", "will" or similar words suggesting future
outcomes, events or performance. These statements involve known and
unknown risks, assumptions, uncertainties and other factors that
may cause actual results or events to differ materially from those
anticipated in such forward-looking statements. Although the
Company believes there is a reasonable basis for the expectations
and assumptions reflected in the forward-looking statements, undue
reliance should not be placed on the forward-looking statements
because the Company can give no assurances that they will prove to
be correct. The forward-looking statements contained in this news
release speak only as of the date hereof and are expressly
qualified by this cautionary statement.
Specifically, this news release contains forward-looking
statements relating to, but not limited to: the Renewable
Initiatives opportunities; production at the PGR; plans for, and
anticipated outcomes of, the renewable diesel and renewable
hydrogen complex at the PGR, the canola co-processing project, and
the FCC co-processing project at the PGR; receipt of government
funding commitments; anticipated costs and capital outlay
associated with the Renewable Initiatives projects; consumer use
and demand for renewable diesel, renewable hydrogen and other
renewable resources; expected timing and results of the Renewable
Initiatives projects; expected environmental impact of the
Renewable Initiatives, including reduction of greenhouse gas
emissions and lower carbon intensity as compared to conventional
products; availability of further opportunities to reduce the
carbon intensity of the renewable diesel produced at the PGR;
potential future benefits from increasing federal carbon tax,
Canadian Clean Fuel Standards credits, and BC Low Carbon Fuel
Standard credits by leveraging off the Company's existing assets
in BC and Alberta; success and viability of other Renewable
Initiatives expected to increase the size and scale of the
Company's renewable portfolio and results; federal carbon tax and
fuel standards credits available and applicable to the Company; the
Company's plans to continue evaluation of options to expand and
fund Renewable Initiatives; and the Company's plans to deleverage
through 2021.
Such forward-looking statements are based on a number of
assumptions which may prove to be incorrect. In addition to other
assumptions identified in this document, assumptions have been made
regarding, among other things: Tidewater's ability to execute on
its business plan; the timely receipt of all governmental and
regulatory approvals or commitments; the availability of capital to
fund planned and future capital expenditures; that third parties,
counterparties and governments will provide any necessary and
expected support; that there are no unforeseen events preventing
the performance of contracts; ability to negotiate and enter into
new commercial arrangements relating to the Renewable Initiatives
with counterparties, customers and other third parties; the
viability, costs, results and environmental impact of the Company's
various Renewable Initiatives, including both current and planned
projects; the Company's operating activities and results from
operation based on key input assumptions, including incremental and
one-time project and operating costs, revenue and EBITDA; ability
to complete Renewable Initiatives projects within expected
timeframes and costs; availability of third party participation
required for completion of the Company's planned Renewable
Initiatives projects; current industry conditions, laws and
regulations continuing in effect (or, where changes are proposed,
such changes being adopted as anticipated); consumer use and demand
for renewable diesel, renewable hydrogen and other renewable
resources; general demand for renewable products; availability of
capital for Renewable Initiatives projects on commercially
reasonable terms; counterparty participation in Renewable
Initiatives projects; and the availability and amount of
governmental carbon tax and fuel standards credits applicable to
the Company.
Actual results achieved will vary from the information provided
herein as a result of numerous known and unknown risks and
uncertainties and other factors, including but not limited to:
general economic, political, market and business conditions,
including fluctuations in interest rates, foreign exchange rates
stock market volatility and supply/demand trends; the uncertain
impacts of COVID-19 on the Company's business, and the societal,
economic and governmental response to COVID-19; activities of
producers and customers and overall industry activity levels;
operational matters, including potential hazards inherent in the
Corporation's operations and the effectiveness of health, safety,
environmental and integrity programs; actions by governmental
authorities, including changes in government regulation, tariffs,
taxation and credit programs, including changes to the commitments
the Company has received from governmental authorities in respect
of the Renewable Initiatives; changes in operating and capital
costs, including fluctuations in input costs; ability to access
sufficient capital to fund Renewable Initiatives; and changes in
demand for renewable products.
The foregoing lists are not exhaustive. Additional information
on these and other factors which could affect the Company's
operations or financial results are included in the Company's most
recent annual information form and in other documents on file with
the Canadian Securities regulatory authorities.
The above summary of assumptions and risks related to
forward-looking statements in this news release has been provided
in order to provide shareholders and potential investors with a
more complete perspective on Tidewater's current and future
operations and such information may not be appropriate for other
purposes. There is no representation by Tidewater that actual
results achieved will be the same in whole or in part as those
referenced in the forward-looking statements and Tidewater does not
undertake any obligation to update publicly or to revise any of the
included forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
by applicable securities law.
This news release contains financial outlook information about
projected results of operations, EBITDA and operating costs, which
are subject to the same assumptions, risk factors, limitations and
qualifications as set forth in the above paragraphs. The financial
outlook information was approved by management of Tidewater as of
the date of this news release and was provided for the purpose of
providing further information about the Company's anticipated
future business operations. Readers are cautioned that reliance on
such information may not be appropriate for other purposes.
Tidewater disclaims any intention or obligation to update or
revise any financial outlook information contained in this news
release, whether as a result of new information, future events or
otherwise, unless required by applicable securities law.
Non-GAAP Measures
This press release refers to "EBITDA" which does not have any
standardized meaning prescribed by generally accepted accounting
principles in Canada
("GAAP"). EBITDA is calculated as income or loss before
interest, taxes, depreciation, share-based compensation, unrealized
gains/losses, non-cash items, transaction costs, items that are
considered non-recurring in nature and the Corporation's
proportionate share of EBITDA in their equity investments.
Tidewater's management believes that EBITDA provides useful
information to investors as it provides an indication of results
generated from the Corporation's operating activities prior to
financing, taxation and non-recurring/non-cash impairment charges
occurring outside the normal course of business. EBITDA is used by
management to set objectives, make operating and capital investment
decisions, monitor debt covenants and assess performance. In
addition to its use by management, Tidewater also believes EBITDA
is a measure widely used by security analysts, investors and others
to evaluate the financial performance of the Corporation and other
companies in the midstream industry. Investors should be
cautioned that EBITDA should not be construed as alternatives to
earnings, cash flow from operating activities or other measures of
financial results determined in accordance with GAAP as an
indicator of the Corporation's performance and may not be
comparable to companies with similar calculations.
For more information with respect to financial measures which
have not been defined by GAAP, including reconciliations to the
closest comparable GAAP measure, see the "Non-GAAP Measures"
section of Tidewater's most recent MD&A which is available on
SEDAR.
Additional information relating to Tidewater is available on
SEDAR at www.sedar.com and at www.tidewatermidstream.com.
SOURCE Tidewater Midstream and Infrastructure Ltd.