Pembina Pipeline, KKR to sell stake in gas pipeline for $662 million


Deal gives buyer Stonepeak access to LNG as Asian appetite grows

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Pipeline operator Pembina Pipeline Corp.’s joint venture with KKR & Co. has agreed to sell its 50 per cent stake in the Key Access Pipeline System (KAPS) to private equity firm Stonepeak Partners for $662.5 million.

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The deal provides Stonepeak access to a pipeline system that moves natural gas liquids to processing facilities for export to Asia, a market with a growing appetite for North American liquefied natural gas (LNG) as it moves away from coal and as reduced Russian exports leave a void in global supply.

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Formed in March through deals worth $11.4 billion, the joint venture PGI is owned 60 per cent by Pembina while KKR’s global infrastructure funds hold the rest.

KAPS is a 560-kilometre pipeline system that transports natural gas liquids between Western Canada’s Montney and Duvernay fields to Keyera’s processing facilities in Fort Saskatchewan, Alta.

Keyera Corp. will continue holding the remaining 50 per cent stake in KAPS and will operate the asset, Stonepeak said.

Both the companies said the sale is expected to close in the first quarter of 2023.

© Thomson Reuters 2022

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