Pembina Pipeline Corporation (NYSE: PBA), a Canada-based oil and gas storage and transportation company, has announced a major acquisition through its joint venture Pembina Gas Infrastructure Inc. ("PGI"). This agreement with Veren Inc. (NYSE: VRN) involves acquiring its Gold Creek and Karr area oil batteries, coupled with a significant investment in future infrastructure development.
The strategic acquisition represents a key milestone in Pembina's growth, expanding the company's infrastructure footprint and strengthening its partnership with VRN, a prominent player in the Montney and Duvernay regions.
Details of the Agreement Between PBA & VRN
The acquisition involves four batteries in the Gold Creek and Karr areas, contributing significantly to PGI's existing infrastructure. These batteries boast a natural gas handling capacity of 320 million cubic feet per day and liquids handling capacity of 53,000 barrels per day. The natural gas processed from these batteries is directed to PGI's Patterson Creek Gas Plant, with the batteries and the plant integrated into Pembina's Peace Pipeline system.
Calgary-based VRN will play a major operational role with the newly acquired assets. According to the agreement, this Canadian oil and gas exploration and production company will manage the newly acquired batteries and the existing PGI-owned batteries in the region. Under this arrangement, VRN will handle all operating costs and maintenance capital, establishing itself as the primary operator for these facilities.
PGI will invest up to C$300 million and approximately one-third of this funding has already been committed, which reflects the seriousness of the collaboration. VRN, as part of this agreement, will oversee the construction and operation of the batteries, while PGI focuses on the high-pressure gathering pipelines that support this infrastructure.
Key Financial Aspects of PBA's Acquisition
The net purchase price is C$400 million (C$240 million net ...
