Canada’s Pembina Pipeline to sell NGL pipeline interest
Canada’s Pembina Pipeline said December 12 it had reached an agreement to sell its 50% non-operated interest in the Key Access Pipeline System (KAPS) for C$662.5mn (US$484.6mn).
The KAPS interest is currently held by Pembina Gas Infrastructure (PGI), the joint venture created earlier this year by Pembina Pipeline and global infrastructure fund KKR. KAPS is a C$2bn (US$1.46bn) twin-pipeline system designed to deliver natural gas liquids and condensate to liquids processing and storage hubs at Fort Saskatchewan.
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In a separate release, Stonepeak Partners, an alternative investment firm specialising in infrastructure assets, said it had acquired the interest from PGI, with an eye on the developing LNG corridor between western Canada and Asia.
“We believe that North American hydrocarbons, particularly natural gas, will continue to be an important component of the global energy mix for the foreseeable future, especially as efforts to decarbonise East Asia continue – natural gas production growth in western Canada will play a critical role in those efforts,” Stonepeak senior managing director Anthony Borreca said.
PGI acquired the KAPS holding in August 2022 as part of its acquisition of Energy Transfer Canada. Canadian midstream infrastructure company Keyera, which holds the remaining interest in KAPS and is the operator, said in its Q3 2022 report in November the project was 90% complete and operations were expected to begin by the end of Q1 2023.
Under terms of the sale agreement, PGI will continue to fund its share of KAPS project costs until the end of 2023, an equity contribution expected to reach C$50mn. On closing, anticipated in Q1 2023, PGI will receive cash proceeds of C$662.5mn, which will be used to pay down debt associated with KAPS construction funding.