Pembina has entered into definitive agreements with KKR to combine their respective western Canadian natural gas processing assets into a single, new joint venture ("Newco"), which will be owned 60% by Pembina and 40% by KKR's global infrastructure funds, in a CAD11bn (US$9bn) transaction.
The merger will include Pembina's field-based gas processing assets, the Veresen Midstream business (currently owned 55% by KKR and 45% by Pembina), and activities carried out by Energy Transfer Canada ("ETC") (currently owned 49% by KKR). Newco will also acquire Energy Transfer's remaining 51% interest in ETC. The new entity will have a processing capacity of 5 bcf/d (51 bcm/year), 25 processing facilities and 3,350 km of pipelines. Pembina expects around CAD700m (US$550m) in cash proceeds upon closing.