Kinder Morgan Canada acquired by Pembina Pipeline in $4bn deal

Tyler Orton - Business in Vancouver | August 21, 2019 | 1:50 pm Energy Canada USA Oil & Gas

Station piping at Pembina’s Valleyview Terminal Facility south of Valleyview, Alberta. Image from Pembina Pipeline Corp.

Pembina Pipeline Corporation (TSX:PPL) is set to acquire the former owner of the Trans Mountain pipeline in a deal pegged at $4.35 billion.

Calgary-based Pembina announced Wednesday (August 21) plans to buy Kinder Morgan Canada Ltd. (TSX:KML) and the U.S. portion of the Cochin pipeline, which runs 2,900 kilometres from Fort Saskatchewan to Chicago.

The American portion of the pipeline is owned by Kinder Morgan Inc., a separate entity from Kinder Morgan Canada.

The transaction values Kinder Morgan Canada at $2.3 billion, or $15.02 per share, while the American Cochin assets are valued at $2.05 billion for cash consideration.

“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 president and CEO Mick Dilger said in a statement.

The deal also includes Vancouver Wharves, a 51-hectare bulk marine terminal facility transferring more than 4 million tonnes of bulk cargo annually.

Pembina said it has already identified a number of expansion possibilities for Vancouver Wharves.

The pending sale comes about a year after Ottawa closed a deal to acquire the controversial Trans Mountain pipeline from Kinder Morgan Canada for $4.5 billion.

Since then, Kinder Morgan Canada has been dipping its toes on the market but found no takers until this deal.

(This article first appeared in Business in Vancouver)