Pembina Pipeline to acquire Kinder Morgan Canada

Pembina Pipeline Corp. has agreed to acquire Kinder Morgan Canada Ltd. (KML), including the 70% majority voting interest held by Kinder Morgan Inc. (KMI) as well as the US portion of the Cochin Pipeline, from KMI for $4.35 billion (Can.).

Pembina Pipeline Corp. has agreed to acquire Kinder Morgan Canada Ltd. (KML), including the 70% majority voting interest held by Kinder Morgan Inc. (KMI) as well as the US portion of the Cochin Pipeline, from KMI for $4.35 billion (Can.). The Cochin system extends from the Kinder Morgan station near Riga, Mich., to the international boundary near Maxbass, ND. Closing of the two transactions are cross-conditioned upon each other.

Included in the deal is Vancouver Wharves, a commodity export-import business in the Port of Vancouver. Vancouver Wharves is a 125-acre bulk marine terminal facility, which transfers more than 4 million tonnes/year of bulk cargo supported by fee-based contracts. Pembina has identified expansion possibilities at Vancouver Wharves.

Cochin, a cross-border condensate import pipeline, spans 2,900 km from Chicago to Fort Saskatchewan, Alta., with design capacity of as much as 110,000 b/d. It is primarily underpinned by long term, take-or-pay commitments. It connects Pembina’s Channahon, Bakken, and Edmonton area assets and is connected to markets in Mont Belvieu, Conway, and Edmonton. The company said there is potential to connect the eastern leg of the system to Pembina’s assets and markets in Sarnia, Ont.

The deal also includes a crude oil storage and terminalling business with 10 million bbl (net) of storage capacity in the Edmonton area crude oil complex, which connects Pembina’s conventional and oil sands pipelines to major export systems. The storage business includes direct connectivity to two rail terminals, ownership in which is included in the transaction.

After closing, KML shareholders will receive 0.3068 of a share of Pembina for each KML share. Closing of the proposed transaction is expected late in this year’s fourth quarter or in first-quarter 2020 subject to conditions including the approval of KML shareholders and the Court of Queen's Bench of Alberta, as well as certain regulatory approvals and customary closing conditions.

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