Pembina Pipeline Corp. has agreed to acquire rival company Kinder Morgan Canada Ltd. (KML), in addition to its United States portion of the Cochin Pipeline for a value of C$4.35 billion ($3.26 billion).
As part of the deal, KML shareholders will receive .3068 shares of Pembina for $15.12 per each KML share, a 38 percent premium to KML’s closing price.
“KML views Pembina as a leading infrastructure services provider to the North American energy industry,” said Steve Kean, KML board chairman and CEO. “This transaction gives KML’s public shareholders the opportunity to participate in a larger and growing platform of North American midstream energy assets.”
In addition, Kinder Morgan, Inc., which holds a 70 percent stake in KML, sold Pembina the Cochin Pipeline portion for $1.546 billion. The pipeline system consists of an 1,810-mile long pipeline that spans from Fort Saskatchewan, Alberta, to Windsor, Ontario, in Canada.
The Cochin Pipeline crosses through three provinces in Canada and seven states in the United States, transporting light hydrocarbon liquids. It is currently moving light condensate westbound from the new Kinder Morgan Cochin terminal in Kankakee County, Ill., to existing terminal facilities near Fort Saskatchewan. The pipeline has an estimated system capacity of approximately 95,000 barrels per day.
The transaction is expected to close in either the fourth quarter of 2019 or in the first quarter of 2020.