Pembina Fuel Infrastructure Inc. (PGI) has accomplished the acquisition of a 50 p.c stake within the Kaybob Advanced in Alberta, Canada, from Whitecap Sources Inc. for CAD 420 million ($293.6 million).
The Kaybob Advanced, within the Fox Creek area, has a pure fuel processing capability of 165 million cubic ft a day (MMcfd) and a condensate stabilization capability of 15,000 barrels per day, in line with Whitecap. Whitecap retains operatorship and the remaining 50 p.c curiosity.
“As a part of the Kaybob Advanced acquisition, PGI and Whitecap entered into long-term, take-or-pay contracts at PGI’s close by K3 facility to additional help Whitecap’s liquids-rich developments”, Pembina Pipeline Corp. (Pembina), which holds a 60 p.c possession in PGI, stated in a web based assertion. Kaybob South 3 (K3) is a fuel processing plant with a licensed capability of 671 million cubic ft a day, in line with info on Pembina’s web site.
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“Based mostly on Whitecap’s drilling outcomes and up to date forecasts, PGI now expects capability on the Kaybob Advanced to be totally utilized and has superior developments to facilitate volumes on the K3 facility, that are anticipated to start within the third quarter of 2025, or roughly one 12 months sooner than initially contemplated”, the assertion added.
As a part of the transaction PGI will fund future infrastructure growth in Whitecap’s Lator space, together with battery and gathering laterals that PGI will ultimately personal. In change Whitecap signed long-term take-or-pay agreements for precedence entry to the brand new infrastructure, which can hyperlink PGI’s Musreau facility to the Lator space.
PGI expects to spend as much as CAD 400 million (CAD 240 million internet to Pembina) on the primary part of the brand new Lator infrastructure, “backstopped by long-term take-or-pay agreements primarily based on the capital spent”, Calgary, Canada-based Pembina stated. Fuel from the brand new infrastructure will movement to the Musreau facility upon startup late 2026 or early 2027.
“Along with the Musreau facility, PGI has two different deep-cut processing amenities within the neighborhood that might present incremental, well timed and cost-effective processing options to Whitecap”, Pembina acknowledged.
It added, “All pure fuel liquids produced by way of the Kaybob Advanced and Lator Infrastructure developments will movement by way of Pembina’s downstream infrastructure and are coated below a mixture of recent and prolonged long-term transportation, fractionation, and advertising providers agreements, in addition to an area-of-dedication for future development”.
“This may help larger utilization of Pembina’s Peace Pipeline and Redwater Advanced, together with the RFS IV growth, at the moment below building”, Pembina stated.
“Additional, the association for Whitecap’s Lator space growth contains deep-cut processing and ethane-plus NGL transportation and fractionation, which helps Pembina’s ethane provide commitments in relation to Dow’s Path2Zero venture”.
Pembina shouldered CAD 252 million of the full transaction proceeds. Closing had initially been anticipated within the third quarter of 2024, primarily based on the announcement of the settlement July 2, 2024.
In a separate transaction, PGI stated it had acquired from Veren Inc. “a request for extra battery infrastructure anticipated to enter service in 2025”. PGI has a pending settlement with Veren, previously Crescent Level Power Corp., to amass Veren’s Gold Creek and Karr space oil batteries and supply as much as CAD 300 million in funding for future infrastructure growth within the space.
Fuel from the batteries is processed at PGI’s Patterson Creek Fuel Plant. The plant and batteries connect with Pembina’s Peace Pipeline system.
“Additional scope definition of the preliminary battery, plus the extra battery infrastructure request, brings the full funding dedication to roughly [CA]$200 million ([CA]$120 million internet to Pembina), which might be supported by long-term take-or-pay commitments”, Pembina stated within the assertion saying the closure of the Whitecap transaction.
Veren, additionally primarily based in Calgary, will retain operatorship of the property being bought to PGI and assume operatorship of present PGI-owned batteries within the space, in line with the announcement of the settlement September 9, 2024.
To contact the creator, e mail jov.onsat@rigzone.com
