Inter Pipeline Ltd. has struck a deal to sell a significant portion of its European bulk energy storage assets to Spain’s CLH Group for $715 million.

Under the terms of the deal, CLH will acquire Inter Pipeline’s 15 storage terminals in the United Kingdom, Ireland, Netherlands and Germany, which have about 18 million barrels worth of storage capacity. Those terminals accounted for about two-thirds of Inter Pipeline’s cashflow from its European operations.

The deal is expected to close in the fourth quarter of this year.

In a release Tuesday, Inter Pipeline President and Chief Executive Officer Christian Bayle said the sale of those assets would allow the company to redeploy cash to its North American operations.

"Monetizing a significant portion of our European asset base enables us to focus resources on developing our higher growth Canadian businesses,” Bayle said.

“As such, proceeds from the sale will be used to reduce debt, strengthen our balance sheet and assist with financing our large capital expenditure program, including the Heartland Petrochemical Complex." 

The company initially announced it was exploring a sale of its European operations in August 2019, but suspended the sale process in March due to the precipitous decline in global energy prices as a result of the COVID-19 pandemic. That drop in prices also prompted the company to slash its monthly distribution 72 per cent to four cents per share.

Inter Pipeline will continue to own and operate its eight terminals in Sweden and Denmark.