CALGARY — Pembina Gas Infrastructure Inc. has signed a deal to buy a group of infrastructure assets from Veren Inc. for $400 million.
Under the agreement, PGI — a Western Canadian gas processing company jointly owned by Pembina Pipeline Corp. and private equity firm KKR — will acquire four oil batteries in the Gold Creek and Karr areas of the Montney, a fossil-fuel-producing region of northwest Alberta.
The batteries include natural gas handling capacity of 320 million cubic feet per day and liquids handling capacity of 53,000 barrels per day. 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, formerly Crescent Point Energy Corp., will retain operatorship of the acquired assets. The deal will also see Veren acquire full operatorship of four oil battery sites which are currently operated by PGI.
The deal will also see PGI fund up to $300 million, of which about one-third has already been committed, for Veren’s future battery and gathering infrastructure in the area.
In a news release, Pembina said the deal strengthens the company’s existing partnership with Veren, which has 20 years of drilling inventory and prolific assets in both the Montney and the Duvernay oil-and-gas-producing regions.
“We are thrilled to enhance and further align our strategic partnership with Veren,” said PGI president and CEO Chris Rousch.
Veren said it will use the $400 million in proceeds to help pay down its debt.
The transaction is expected to close in the fourth quarter.
This report by The Canadian Press was first published Sept. 9, 2024.
Companies in this story: (TSX:PPL, VRN)
Amanda Stephenson, The Canadian Press