Calgary-based pipeline company to acquire Vantage pipeline system

Pembina Pipeline Corp., a Calgary-based energy company, is set to acquire the Vantage 700-kilometre pipeline system.  Vantage is a recently constructed, 40,000 barrel per day, high vapour pressure pipeline that originates in Tioga, North Dakota and terminates near Empress, Alberta, which gives access to the U.S. state's North Bakken formation for natural gas liquids. This fee-for-service pipeline is expected to have a maximum capacity of 60,000 barrels per day.

The US$650-million transaction with private equity firm Riverstone Holdings LLC also includes Mistral Midstream Inc.'s interest in the Saskatchewan Ethane Extraction Plant, a liquid byproduct of natural gas production. The Saskatchewan extraction plant for ethane will eventually connect to the Vantage pipeline system.

Pembina says the Vantage pipeline system links a growing supply of ethane from North Dakota to the petrochemical market in Alberta.

"We have watched the development of these assets with great interest as they represent an excellent opportunity to expand our footprint into one of the most promising hydrocarbon plays in North America and, as such, the transaction is a low-risk, logical step-out for Pembina,'' president and CEO Mick Dilger said in a news release Monday.

Pembina said the transaction is expected to add cash flow per share in 2016.

The deal is subject to regulatory approvals, including from the National Energy Board and the Canada Transportation Act. It is expected to close in the fourth quarter of 2014.

Stuart Taylor, Pembina's Senior Vice President, NGL & Natural Gas Facilities commented, "SEEP and its associated pipeline infrastructure are very attractive to Pembina. With these assets, we'll be making a low-risk entry into the prolific Bakken play in Saskatchewan and we'll be adding another fee-for-service gas plant to our portfolio."

Pembina owns and operates pipelines that transport various hydrocarbon liquids including conventional and synthetic crude oil, heavy oil and oil sands products, condensate and natural gas liquids produced in Western Canada.

Source  Pembina Pipeline Corporation