Comprehensive Energy Data Intelligence
Information About Energy Companies, Their Assets, Market Deals, Industry Documents and More...
Pembina (PBA) to Acquire Enbridge's Joint Ventures for $2.3 Billion - C$3.1 Billion
12/15/2023
Pembina Pipeline Corporation PBA, a well-known player in the Canadian midstream sector, recently announced its plan to acquire Enbridge Inc.'s remaining shares in the Alliance Pipeline, Aux Sable pipelines, and NRGreen joint ventures. The deal, valued at C$3.1 billion or US$2.3 billion, marks a key step for Pembina in asserting its leadership in North America's natural gas transportation sector. This strategic acquisition is expected to considerably boost Pembina's growth and profitability in the coming years.
"The sales proceeds will fund a portion of the strategic U.S. gas utilities acquisitions and be used for debt reduction," Enbridge said.
Background Details
The Alliance Pipeline is an essential part of the North American energy infrastructure, stretching approximately 3,888 kilometers (2,414 miles). It plays a crucial role in transporting natural gas from western Canada to the bustling Chicago market.
Located in Illinois, the Aux Sable processing plant is a vital link in this chain, processing the natural gas liquids (NGL) from the pipeline.
“Alliance and Aux Sable are world-class energy infrastructure assets and increasing our ownership in them will further strengthen our growing franchise.”
- Scott Burrows, Pembina’s President and CEO
Acquisition Details
Pembina is set to acquire a 50% interest in Alliance and a 42.7% interest in Aux Sable, along with stakes in NRGreen joint ventures. Additionally, Pembina will take on C$327 million of Enbridge's debt in Alliance. This move is a big deal for Pembina, giving them full control over these critical assets and enhancing their flexibility and efficiency in operations.
- By taking over Enbridge's stakes, Pembina significantly expands its role in the natural gas transportation market.
- Owning both the Alliance Pipeline and Aux Sable plant means Pembina can operate more efficiently, saving costs and improving the integration of its gas transportation and processing operations.
- This move fits well with Pembina's growth plans. It helps the company diversify its business and reduce its dependence on any single type of commodity, potentially leading to more stable and growing revenues.
- With this acquisition, Pembina strengthens its ability to support the move towards cleaner energy, as natural gas and NGLs are key in this transition.
The deal is expected to close in the first half of 2024, pending regulatory approvals and standard closing conditions.
"The Alliance and Aux Sable system has been a reliable and profitable asset for Enbridge for many years. We would like to thank our high-quality team for their commitment to safety and reliability."
- Cynthia Hansen, EVP and President, Gas Transmission and Midstream
Pembina Pipeline Corporation (PBA) Overview
Pembina Pipeline Corporation, with over 65 years of service in North America's energy sector, specializes in energy transportation and midstream services. The company boasts a wide-ranging operation network, including hydrocarbon liquids and natural gas pipelines, gas processing facilities, and logistics services. For 2024, Pembina projects an adjusted EBITDA between $3.725 and $4.025 billion and plans a capital investment of $880 million, reflecting its commitment to providing reliable energy infrastructure. Its shares are traded on the Toronto and New York stock exchanges under the symbols PPL and PBA.
Enbridge Inc. Overview
Enbridge Inc., a longstanding energy company, is making strides in sustainable energy. Based in Calgary, Alberta, Enbridge is known for supplying natural gas, oil, and renewable power in North America and expanding into European offshore wind projects. With a history of over a century in traditional energy and two decades in renewables, the company is now focusing on innovative technologies like hydrogen and carbon capture to achieve net-zero emissions by 2050.
Enbridge's shares are listed on the Toronto and New York stock exchanges under the symbol ENB. The company's shift towards sustainable energy solutions reflects its commitment to a greener future
If you are looking for more information about energy companies, their assets, and energy deals, please, contact our sales office mapping@hartenergy.com, Tel. 619-349-4970 or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business.
Chevron to Sell Stake in Canada’s Duvernay Shale
Chevron is selling its Canadian shale production operations as part of a wider plan to concentrate its investments on more profitable projects in the United States.
Who's Next after Diamondback? Potential Takeover Targets in the Permian Basin
The $26 billion purchase of Endeavor Energy Resources by Diamondback Energy, with its stock up 2.6%, is the newest big deal combining oil and gas production in the Permian Basin under a few big companies
The pipeline industry in the USA faced and still faces a range of regulatory challenges, including permitting delays, environmental requirements, and public opposition to pipeline projects. In recent years, pipeline projects like the Keystone XL and Dakota Access pipelines had legal and regulatory obstacles that delayed or canceled their construction. Keystone XL Pipeline, proposed by TransCanada in 2008, aimed to transport crude oil from Canada (around Calgary and Edmonton) to refineries on the Gulf Coast (Port Arthur). The project faced opposition from environmental groups and indigenous communities, who argued that it would contribute to climate change and pose a risk to water resources. In 2015, President Obama rejected the project, citing concerns about its environmental impact. However, in 2017, President Trump revived the project, leading to further legal challenges. In June 2021, U.S. President Joe Biden officially canceled the project on his first day in office.
The renewable natural gas (RNG) industry in the United States is showing promising signs of growth. As of 2019, the U.S. consumed 261 billion cubic feet (BCF) of RNG, primarily utilized by independent power producers, electric utilities, and various commercial and industrial entities. However, this figure represents only a small fraction of its potential. Research indicates that the U.S. could theoretically produce up to 2,200 BCF of RNG through anaerobic digestion alone, which would equate to about 11% of daily national natural gas consumption.
Recently, the progress toward an energy transition is hitting a snag. Sales of electric vehicles are decelerating, and the growth in wind and solar power needs to be keeping pace with expectations. To make matters more challenging, electricity prices are climbing when they were expected to fall. Amidst these setbacks, the oil and gas sectors are proving resilient. According to BP's latest energy outlook, not only are these energy mainstays here to stay, but their demand is expected to remain relatively high even after reaching a peak. Interestingly, BP forecasts that oil demand will reach its zenith next year, marking a critical moment in energy consumption trends. This isn't the first time BP has projected a peak in oil demand. Back in 2019, their review anticipated a decline in demand growth, but the prediction fell flat. Instead, oil demand surged to unprecedented levels following the end of the global pandemic lockdowns, defying previous forecasts and underscoring the enduring dominance of traditional energy sources in the global market.