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Pembina eyes US growth opportunities with acquisition

January 30, 2024 By    

Pembina Pipeline Corp., an energy transportation and midstream service provider based in Calgary, Alberta, Canada, entered an agreement in December to acquire all of Enbridge’s interests in the Alliance, Aux Sable and NRGreen joint ventures for an aggregate purchase price of approximately $3.1 billion.

Pembina currently owns 50 percent of the equity interests in Alliance, Aux Sable’s Canadian operations and NRGreen and approximately 42.7 percent of the equity interests in Aux Sable’s U.S. operations. Upon closing of the acquisition, Pembina will hold 100 percent of the equity interests in Alliance, Aux Sable’s Canadian operations and NRGreen and approximately 85.4 percent of Aux Sable’s U.S. operations (Williams owns the remaining portion). Pembina also will become the operator of all the Alliance, Aux Sable and NRGreen businesses.

Alliance delivers liquids-rich natural gas sourced in northeast British Columbia, northwest Alberta and the Bakken region to Chicago. Aux Sable operates NGL extraction and fractionation facilities in both Canada and the U.S., with extraction rights on Alliance, offering connectivity to key U.S. NGL hubs. NRGreen works to develop clean energy by converting waste heat generated at compressor stations along the Alliance Pipeline system to produce electric power.

Pembina says the consolidation complements its strategy of providing resources from the Western Canadian Sedimentary Basin (WCSB) to premium end markets and increases its exposure to lighter hydrocarbons, including natural gas and NGLs. By increasing its ownership interest in Alliance and Aux Sable, Pembina adds, it looks to expand its U.S. presence, including in the robust NGL market.

“The acquisition grows and strengthens our existing franchise and provides greater exposure to resilient end-use markets,” says Scott Burrows, Pembina’s president and CEO. “Pembina is well positioned to benefit from growing volumes in the WCSB driven by near-term catalysts, including new West Coast LNG export capacity, expanded crude oil export capacity, as well as developments in the Alberta petrochemical industry.”

The acquisition is expected to close in the first half of 2024.

Featured homepage photo: Aaron Whitfield/Red Bike Media

About the Author:

Brian Richesson is the editor in chief of LP Gas Magazine. Contact him at brichesson@northcoastmedia.net or 216-706-3748.

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