Houston-based Energy Transfer LP has agreed to sell its 51% stake in its Canadian arm for about C$1.6 billion ($1.3 billion) to a joint venture that includes Pembina Pipeline Corp. and global infrastructure funds managed by KKR.
Energy Transfer Canada ULC is one of the largest natural gas processors in Alberta. Its assets include six gas processing plants, and a gas gathering and transport network that spans about 848 miles in the Western Canadian Sedimentary Basin.
“The agreement allows Energy Transfer to divest its high-quality Canadian assets at an attractive valuation to further deleverage its balance sheet and redeploy capital within its U.S. footprint,” management said.
The transaction, slated to close by the third quarter, is expected to result in cash proceeds of about C$340 million ($270 million), the firm said.
Energy Transfer is a publicly traded limited partnership with a midstream presence in all of the major U.S. production basins.
In an earnings call last month, Thomas Long, co-CEO, said the firm was gauging interest from potential shippers in a 260-mile natural gas pipeline from the Permian Basin to the Gulf Coast.
The company also said last month it had completed the Mariner East natural gas liquids pipeline in the Appalachian Basin. The project had faced numerous legal and regulatory setbacks.
Pembina, for its part, cited a “renewed sense of optimism” for the Canadian oil and gas industry in presenting its fourth quarter results. Pembina is advancing front end engineering and design work on the Cedar liquefied natural gas export project in Kitimat, British Columbia. It also is part of a consortium seeking to purchase the Trans Mountain Pipeline once the oil conduit’s expansion is complete.
Read More: Energy Transfer Selling Canada Natural Gas Business for $1.3B