Canadian-based company Pembina Pipeline closed the completion of a CA$3.1 billion (US$2.9 billion) deal to buy Enbridge pipeline and NGL interests, the company said on April 1.
Pembina acquired Enbridge’s 50% stake in the Alliance Pipeline and 43% interest in Aux Sable, which operate NGL fractionation facilities in Canada and the U.S. The Alliance line transports liquids-rich natural gas from the Alberta province to the Aux Sable facility.
The deal, initially announced in December 2023, enhances Pembina’s NGL production and receives access to a larger market to sell the product. The acquisition enhances Pembina’s NGL capacity while realizing access to a larger market to sell the product.
During the fourth-quarter, NGLs helped midstream companies stay resilient even as natural gas prices remained in the cellar.
"Aligning with Pembina’s strategy, this acquisition grows and strengthens our existing franchise and provides greater exposure to resilient end-use markets," said Scott Burrows, Pembina president and CEO in a press release.
Pembina paid for the deal partially through the proceeds of a CA$1.28 billion offering of subscription receipts.
Following the closer, Pembina raised it’s 2024 EBITDA guidance range to CA$4.05 billion to CA$4.30 billion, up from the original estimate of CA$3.725 billion to CA$4.025 billion.
According to an Enbridge statement following the closure, the deal is a key element of the company's current financing plan. The proceeds will fund a portion of Enbridge's U.S. gas utilities acquisitions and pay for debt reduction.
Enbridge moved into the gas utility business in September of 2023 with the announcement of three agreements with Dominion Energy for natural gas distribution companies Public Service of North Carolina, EOG, and Questar Gas for a total of US$14 billion.
The acquisition of each utility within the agreements will happen separately. Most recently, Enbridge said March 7 that had closed the acquisition of the East Ohio Gas Co. in early March, which was under the Dominion Energy umbrella.
Recommended Reading
Iraq to Seek Bids for Oil, Gas Contracts April 27
2024-04-18 - Iraq will auction 30 new oil and gas projects in two licensing rounds distributed across the country.
US Raises Crude Production Growth Forecast for 2024
2024-03-12 - U.S. crude oil production will rise by 260,000 bbl/d to 13.19 MMbbl/d this year, the EIA said in its Short-Term Energy Outlook.
NAPE: Turning Orphan Wells From a Hot Mess Into a Hot Opportunity
2024-02-09 - Certain orphaned wells across the U.S. could be plugged to earn carbon credits.
Exxon Versus Chevron: The Fight for Hess’ 30% Guyana Interest
2024-03-04 - Chevron's plan to buy Hess Corp. and assume a 30% foothold in Guyana has been complicated by Exxon Mobil and CNOOC's claims that they have the right of first refusal for the interest.
Petrobras to Step Up Exploration with $7.5B in Capex, CEO Says
2024-03-26 - Petrobras CEO Jean Paul Prates said the company is considering exploration opportunities from the Equatorial margin of South America to West Africa.