Pembina Gas Infrastructure to acquire Canadian midstream assets from Veren

Pembina Gas Infrastructure Inc. (PGI), a Western Canadian focused gas processing entity jointly owned by Pembina Pipeline Corp. and KKR, has entered into agreements with Veren Inc. and certain of its affiliates related to certain infrastructure assets in the Alberta Montney.

PGI will acquire four batteries in the Gold Creek and Karr areas, which include natural gas handling capacity of 320 MMcfd and liquids handling capacity of 53,000 b/d. Natural gas from the batteries is processed at PGI’s Patterson Creek gas plant and both the batteries and the Patterson Creek gas plant are connected to Pembina’s Peace pipeline system.

Veren will retain operatorship of the acquired assets, with operating costs and maintenance capital flowing through to Veren. Veren will also assume operatorship of the existing PGI-owned batteries in the area.

Additionally, PGI will fund up to $300 million (Can.), of which about one-third has already been committed, for Veren’s future battery and gathering infrastructure in the area. Veren will construct and operate the batteries, and PGI will construct and operate high pressure gathering pipelines.

Veren agreed to enter into a 15-year take-or-pay agreement for capacity at the acquired batteries, which also includes an area-of-dedication to PGI for gathering and processing services for all volumes Veren produces out of the Gold Creek and Karr areas.

The net purchase price related to the acquisition of the batteries is $400 million (Can.) ($240 million (Can.), net to Pembina).

Closing is expected to occur in the fourth quarter of 2024 and is subject to the satisfaction or waiver of customary closing conditions, including all required regulatory approvals.