Pembina Pipeline Corp., Calgary, and KKR received a no-action letter from the Canadian Competition Bureau regarding the planned combination of the companies’ respective western Canadian natural gas processing assets into a single, new joint venture entity (Newco).
Issuance of the letter allows Pembina and KKR to proceed with next steps to close the transaction, which is expected to occur in August subject to the satisfaction of the remaining conditions.
Pursuant to an agreement with the Competition Bureau, and consistent with Pembina's and KKR's intention to divest upon announcing their joint venture in March, Pembina and KKR's global infrastructure funds will divest the 50%, non-operated interest in the Key Access Pipeline System which will be contributed into the new joint venture entity as part of the transaction.
Newco is expected to be owned 60% by Pembina and 40% by KKR's funds. Pembina will serve as operator and manager. Included in the assets are Pembina's field-based natural gas processing, the Veresen Midstream business (currently owned 55% by funds managed by KKR and 45% by Pembina), and the business acquired from Energy Transfer Canada, already owned 49% by KKR funds (OGJ Online, Mar. 1, 2022).