KKR & Co. and Pembina Pipeline Corp. agreed to combine their natural gas processing assets in Western Canada to create a new joint venture.
The entity will also acquire certain interests held by Dallas-based Energy Transfer LP. The total transaction value is $9 billion, the companies said in a statement Tuesday. This sum excludes the value of any assets under construction.
Energy Transfer announced that it was selling its 51% stake in Energy Transfer Canada to a joint venture in a transaction valued at $1.3 billion, including debt and preferred stock. Energy Transfer expects a net fee of $270 million when the deal closes later this year.
The combined company, called “Newco” for now, will have a foothold in northeastern British Columbia, a basin with significant gas reserves. Although there is no operational export terminal for liquefied natural gas in the province, several projects have been proposed to supply a growing global market for the fuel.
The public-private combination brings efficiencies and cost reductions, the companies said.
“We share Pembina’s perspective on the positive and essential role that Canadian natural gas plays in the global energy transition and we are pleased to combine these assets to create a stronger platform to seize this opportunity,” said Brandon Freiman. , Head of North American Infrastructure at KKR.
Pembina last week named Scott Burrows as general manager.
Calgary-based Energy Transfer Canada is one of Alberta’s largest licensed natural gas processors, with six plants and 848 miles of pipeline.