(The Canadian Press)

(The Canadian Press)

Pembina buying Kinder Morgan Canada and U.S. portion of Cochin pipeline

The deal also includes an Edmonton storage and terminal business and Vancouver Wharves

Shares in Pembina Pipeline Corp. drifted lower Wednesday morning after it announced it would buy Kinder Morgan Canada Ltd. and the U.S. portion of the Cochin pipeline system in deals it valued at a total of about $4.35 billion.

Pembina traded down as much as 1.8 per cent or 90 cents from Tuesday’s close while Kinder Morgan rose by as much as 35 per cent or $3.86 on the Toronto Stock Exchange.

The companies estimated the Pembina offer for Kinder Morgan represented a 38 per cent premium to its Tuesday close.

“This acquisition is highly strategic for Pembina, providing enhanced integration with our existing franchise, entrance into exciting new businesses and clear visibility to creating long-term value for our shareholders,” said Pembina CEO Mick Dilger in a news release.

“It represents an ideal opportunity to continue building on our low-risk, long-term, fee-for-service business model while extending our reach into the U.S. through a highly desirable cross-border pipeline.”

The Cochin pipeline owned in partnership by Kinder Morgan Canada and its American parent, Kinder Morgan Inc., runs 2,900 kilometres between Fort Saskatchewan, northeast of Edmonton, and Chicago and has a design capacity of up to 110,000 barrels per day.

It imports into Canada a prized light petroleum called condensate which is used to dilute oilsands bitumen to allow it to flow in a pipeline.

The deal also includes an Edmonton storage and terminal business and Vancouver Wharves, a bulk storage and export-import business.

“We believe KML’s assets will be a great fit with Pembina’s business and this transaction is highly beneficial to KML’s shareholders,” said Steve Kean, CEO of both Kinder Morgan Canada and its 70 per cent owner, U.S.-based Kinder Morgan, Inc.

“This transaction gives KML’s public shareholders the opportunity to participate in a larger and growing platform of North American midstream energy assets.”

Pembina is offering 0.3068 of a Pembina share per Kinder Morgan Canada share and class B unit. The acquisition is valued at approximately $2.3 billion including the assumption of Kinder Morgan Canada’s preferred shares and outstanding net debt.

In addition, Pembina is paying roughly $2.05 billion in cash for Kinder Morgan Cochin LLC, which holds Cochin US.

Kinder Morgan Canada was spun off from its American parent in mid-2017 to raise money to build the Trans Mountain pipeline expansion but it sold the pipeline and its expansion project to the federal government for $4.5 billion last summer.

It announced in May it had decided to remain a stand-alone public company after a strategic review of options that could have included the sale of part or all of the corporation.

ALSO READ: Trans Mountain gives contractors 30 days to get workers, supplies ready for pipeline

The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Alex Campbell, Velna Nelson, Beatrice Robinson and Ellen Mason take part in the Sm’algyax Word App and website launched by School District 52 on March 1. (Photo: Supplied by Roberta Edzera)
Prince Rupert SD 52 launches new Sm’algyax word app and website

Database for new language resources stems back more than 30 years

The welcome sign is the first thing new employees moving to Prince Rupert will see as they drive the road into the city. The ‘Prince Rupert - Make it Home’ employment campaign to draw people to the region was launched on Feb. 16. (Photo: K-J Millar/The Northern View)
Stakeholders respond to employee recruitment campaign housing ‘disconnect’

‘Prince Rupert -Make it Home’ is 5-year recruitment and retention campaign

More than 35 families received renoviction notices on Feb. 26, 2020 at Pinecrest Townhomes in Prince Rupert. (K-J Millar/The Northern View)
Renovictions will be tightened in proposed changes to renters laws

Rent freeze, and changes to procedures will benefit Prince Rupert tenants and landlords

Chloe and Koy are two participants in the talent show format of the 2021 annual Children's Fest to be broadcast on community television March 5th and 6th. ()Photo: supplied by Prince Rupert Special Event Society)
30th Annual Children’s Fest takes on a new format

2021 Prince Rupert Children’s Fest will feature a show of local talent

(Phil McLachlan/Capital News)
Murder charge laid in February 2020 stabbing death of Smithers man

Michael Egenolf is charged with the second-degree murder of Brodie Cumiskey

Health Minister Adrian Dix looks on as Dr. Bonnie Henry pauses for a moment as she gives her daily media briefing regarding COVID-19 for British Columbia in Victoria, B.C. THE CANADIAN PRESS/Jonathan Hayward
7 additional deaths and 542 new COVID-19 cases in B.C.

Provincial health officials reported 18 new COVID-19 cases linked to variants of concern

Jobs Minister Ravi Kahlon speaks in the B.C. legislature, describing work underway to make a small business and tourism aid package less restrictive, Dec. 10, 2020. (Hansard TV)
B.C. extends deadline for tourism, small business COVID-19 grants

Business owners expect months more of lost revenues

Anti-pipeline protests continue in Greater Vancouver, with the latest happening Thursday, March 4 at a Trans Mountain construction site in Burnaby. (Facebook/Laurel Dykstra)
A dozen faith-based protestors blockade Burnaby Trans Mountain site in prayer

The group arrived early Thursday, planning to ‘block any further work’

Mid day at the Vancouver Port Intersection blockade on March 3, organized by the Braided Warriors. (Zoë Ducklow photo)
Anti-pipeline blockade at Vancouver intersection broken up by police

Demonstraters were demanding the release of a fellow anti-TMX protester

(Government of B.C.)
Backcountry skiers are dwarfed by the mountains as they make their way along a mountain ridge near McGillivray Pass Lodge located in the southern Chilcotin Mountains of British Columbia, Tuesday, Jan. 10, 2012. Avalanche Canada has issued a special warning to people who use the backcountry in the mountains of western Alberta and eastern British Columbia. THE CANADIAN PRESS/Jonathan Hayward
Avalanche Canada special warning for mountains in western Alberta, eastern B.C.

Avalanche Canada also says everyone in a backcountry party needs essential rescue gear

A recently finished $4.3-million taxiway extension at the Victoria International Airport (not pictured) is unusable because of a blind spot. (Black Press Media file photo)
Blind spot leaves Victoria airport’s new $4.3-million taxiway extension unusable

Solution has been put on hold by COVID-19 pandemic, says airport authority

The City of Vancouver estimates there are 3,500 Canada geese in the city right now, and that number is growing. (Bruce Hogarth)
Help tame Vancouver’s Canada goose population by reporting nests: park officials

The city is asking residents to be on the lookout so staff can remove nests or addle eggs

Chief Justice Christopher Hinkson (Office of the Chief Justice)
Judge questions whether B.C.’s top doctor appreciated right to religious freedom

Lawyer for province says Dr. Henry has outlined the reasons for her orders publicly

Most Read