Pembina Pipeline in Montney deal with Whitecap
Alberta energy infrastructure company Pembina Pipeline said July 2 its Pembina Gas Infrastructure (PGI) subsidiary, held jointly with KKR, has entered into an agreement with Whitecap Resources to acquire a 50% interest in Whitecap’s Kaybob Complex in the Alberta Montney.
Pembina will also support future infrastructure development in Whitecap’s Lator growth area, also in the Montney. Gross proceeds related to the transaction with Whitecap are estimated at C$420mn (US$306.6mn), with C$252mn net to Pembina.
Alongside the transaction with Pembina, Whitecap also announced it had sold a 50% interest in its Musreau gas processing facility in the Montney to Topaz Energy for gross proceeds of C$100mn.
Whitecap’s Kaybob Complex includes natural gas processing capacity of 165mn ft3/day and condensate stabilisation capacity of 15,000 barrels/day. Under terms of the transaction, Whitecap will retain operatorship of Kaybob and will enter into a take-or-pay agreement for PGI’s capacity in the complex and commit to an area of dedication to PGI for all volumes it produces in the area.
At Lator, PGI will fund development of a new battery and gathering lateral, which it will own, while Whitecap has entered into long-term take-or-pay agreements with PGI for priority access to the Lator infrastructure. The deal also includes an area of dedication to PGI for all volumes Whitecap produces in the area.
“Our ability to provide unique and value-added solutions to support Whitecap’s development in both the Montney and Duvernay demonstrates our leading advantage and is why our customers choose us,” PGI CEO Chris Rousch said. “These plays have significant growth potential, and we are proud to be Whitecap’s infrastructure partner.”
Whitecap will retain operatorship of the Musreau facility, which has gas processing capacity of 43mn ft3/day and condensate stabilisation capacity of 12,500 barrels/day. Whitecap has also entered into a long-term fixed take-or-pay commitment with Topaz to access its working interest capacity at Musreau.
Whitecap’s transaction with Topaz closed on June 24, while the transaction with PGI is expected to close in Q3 2024.