Torys is acting as counsel to Pembina Gas Infrastructure, a joint venture between KKR and Pembina Pipeline Corporation, in the disposition of its 50% non-operated interest in the US$1.6 billion Key Access Pipeline System (KAPS), a 560 km natural gas liquids (NGL) and condensate pipeline system that transports natural gas liquids between Western Canada's Montney and Duvernay fields in northwestern Alberta to a liquids processing and storage hub at Fort Saskatchewan.
On December 12, 2022, Pembina Pipeline Corporation ("Pembina") announced that, through a subsidiary, Pembina Gas Infrastructure Inc. ("PGI") entered into an agreement for the sale of its 50% non-operated interest in the Key Access Pipeline System ("KAPS"). PGI is owned 60% by Pembina and 40% by KKR's global infrastructure funds.
Under the terms of the agreement, PGI will continue to fund its share of the project costs, under the current project scope, until the end of 2023. Upon closing of the sale, PGI will receive cash proceeds of US$662.5 million.
PGI will use the proceeds to repay drawn credit facilities associated with the KAPS construction funding. Additional total equity contributions from Pembina to PGI related to KAPS funding under the current project scope are expected to be approximately US$50 million between the fourth quarter of 2022 and the end of 2023.
Closing of the transaction is expected to take place in the first quarter of 2023, subject to approval by the Commissioner of Competition as well as satisfaction of other closing conditions.
Further information can be found on Canada Newswire’s website.
Pembina Pipeline is a leading energy transportation and midstream service provider that has served North America's energy industry for more than 65 years. It owns an integrated network of hydrocarbon liquids and natural gas pipelines, gas gathering and processing facilities, oil and natural gas liquids infrastructure and logistics services, and a growing export terminals business.
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions.
One of the largest infrastructure investors globally, its Global Infrastructure business oversees approximately US$50 billion in infrastructure assets globally (as of September 30, 2022), and has made over 65 infrastructure investments across a range of sub-sectors and geographies.
The Torys team is being led by Derek Flaman and included Amy Maginley, Peter Danner and Matt Bean (corporate/oil & gas), Omar Wakil and Ian Li (competition), Craig Maurice and Steve Marshall (tax).
Torys also acted on the following in connection with this project: