Pembina Pipeline Corporation Announces Successful Closing of PGI’s Acquisition of Interest in Kaybob Complex and Updates on Infrastructure Development in Karr and Gold Creek Areas
Pembina Pipeline Corporation (“Pembina” or the “Company”) is pleased to announce the completion of the acquisition by Pembina Gas Infrastructure Inc. (“PGI”) of a 50 percent working interest in Whitecap Resources Inc.’s (“Whitecap”) 15-07 Kaybob Complex (the “Kaybob Complex”), effective December 31, 2024. This acquisition is a significant milestone for both companies, as it solidifies a strategic partnership for future growth and infrastructure development in Western Canada’s key energy producing regions.
The deal also includes an agreement whereby Whitecap commits to long-term, take-or-pay contracts for PGI’s capacity in the Kaybob Complex, with a dedication of all production volumes from the area. This dedication arrangement ensures that PGI will receive a reliable stream of business from Whitecap’s activities, further enhancing the value of this strategic partnership.
Additionally, Pembina is pleased to provide an update on the ongoing infrastructure development in the Karr and Gold Creek areas, stemming from PGI’s previously disclosed transaction with Veren Inc. (“Veren”). These areas represent key growth regions for PGI, and the ongoing investments in infrastructure are expected to significantly bolster Pembina’s operations in these areas while creating new opportunities for future growth.
Advancing Development of the Kaybob Complex
A critical aspect of PGI’s acquisition of the Kaybob Complex is the long-term, take-or-pay contracts signed between PGI and Whitecap. These agreements cover PGI’s K3 facility, which is strategically located near the Kaybob Complex. The aim is to support Whitecap’s liquids-rich developments in the region by ensuring PGI’s facilities are able to accommodate future volumes of gas production from the area.
Following a review of Whitecap’s updated drilling results and forecasts, PGI anticipates that the capacity at the Kaybob Complex will be fully utilized ahead of schedule. As a result, PGI has already moved forward with the necessary developments to support this increased demand, including expansions at the K3 facility. These developments are expected to come online in the third quarter of 2025, a year earlier than initially planned.
This accelerated timeline reflects both the growing importance of the Kaybob Complex and PGI’s commitment to meeting its obligations to Whitecap. The accelerated schedule underscores PGI’s agility in adapting to evolving market conditions and customer needs, which is crucial for the long-term success of this partnership.
Lator Infrastructure Update: Supporting Future Growth
In conjunction with the Kaybob Complex acquisition, PGI has also entered into an agreement to support Whitecap’s future infrastructure needs in the Lator area. This includes the construction of a new battery and gathering laterals, which will be owned and operated by PGI. The new Lator Infrastructure is supported by long-term take-or-pay agreements with Whitecap, which ensures that PGI will receive consistent and predictable revenue from the area’s development.
PGI’s outlook for Whitecap’s growth in the Lator area has improved significantly since the initial announcement of the transaction. PGI anticipates investing up to $400 million in the first phase of the Lator Infrastructure, with $240 million net to Pembina. This investment will cover the development of the battery and gathering laterals, which are scheduled to be in service by late 2026 or early 2027.
Once operational, the infrastructure will enable gas volumes from Whitecap’s Lator area to flow to PGI’s Musreau facility. The Musreau facility, which is located nearby, is well-positioned to handle these volumes and support long-term utilization of PGI’s facilities. In addition to Musreau, PGI also has two other deep-cut processing facilities in the vicinity that can provide additional processing capacity if needed, offering cost-effective and timely processing solutions to Whitecap.
Strategic Importance of the Full Pembina Value Chain
All natural gas liquids produced through the Kaybob Complex and the Lator Infrastructure will flow through Pembina’s extensive downstream infrastructure, strengthening its integrated value chain. This includes a combination of new and extended long-term transportation, fractionation, and marketing services agreements, as well as an area-of-dedication for future growth.
By leveraging its integrated network, Pembina is well-positioned to provide long-term, reliable solutions for its customers. This also includes supporting higher utilization of Pembina’s Peace Pipeline and Redwater Complex. The Redwater Complex is currently undergoing an expansion through the RFS IV project, which will further enhance Pembina’s capacity to process and transport hydrocarbons.
One of the key components of Pembina’s infrastructure strategy involves deep-cut processing and ethane-plus NGL transportation and fractionation. This infrastructure plays a pivotal role in supporting Pembina’s ethane supply commitments, including its partnership with Dow Chemical in the Path2Zero project. By utilizing its existing infrastructure and expanding its capabilities, Pembina is helping to ensure a sustainable future for the energy sector while supporting the growth and success of its partners.
Gold Creek and Karr Development Update: Capital Investments and Strategic Commitments
As part of its ongoing commitment to infrastructure development in the Karr and Gold Creek areas, PGI entered into an agreement with Veren to fund up to $300 million in capital for future battery and gathering infrastructure. Initially, PGI committed approximately $100 million in capital for these developments, which is net to Pembina.
Since then, Veren has informed PGI of its intention to request additional battery infrastructure, which is expected to enter service in 2025. This request, coupled with further scope definition of the initial battery, has brought the total funding commitment for the project to approximately $200 million, or $120 million net to Pembina.
As with other infrastructure projects, the funding commitment for the Gold Creek and Karr developments is backed by long-term take-or-pay agreements. These agreements ensure that PGI will have a stable revenue stream to support its investments in these projects, creating a secure foundation for future growth in the region.
No Impact on Pembina’s 2025 Guidance or Capital Investment Program
Despite the progress being made on both the Kaybob Complex and Lator Infrastructure projects, Pembina’s 2025 guidance and capital investment program remain unaffected by the closing of the Kaybob Complex acquisition and the funding commitments for the Karr and Gold Creek developments. The company remains on track to meet its financial and operational goals for the upcoming year, which were previously disclosed in Pembina’s guidance issued on December 12, 2024.
Pembina Gas Infrastructure: A Premier Gas Processing Entity
Pembina Gas Infrastructure is a leading gas processing entity in Western Canada, with a combined capacity of five billion cubic feet per day. PGI is jointly owned by Pembina and affiliates of KKR, with Pembina holding a 60 percent interest and serving as the operator and manager of PGI’s facilities. The remaining 40 percent of PGI is owned by KKR’s global infrastructure funds.
PGI is strategically positioned to serve customers across the Montney and Duvernay trends, spanning from central Alberta to northeast British Columbia. This vast geographical footprint, coupled with PGI’s extensive processing capabilities, enables the company to provide customized solutions for its clients in some of the most productive energy regions in Canada.
Pembina Pipeline Corporation: A Leading Energy Transportation Provider
Pembina Pipeline Corporation is a long-established leader in energy transportation and midstream services in North America, with over 70 years of experience serving the energy industry. The company owns an integrated network of hydrocarbon liquids and natural gas pipelines, gas gathering and processing facilities, oil and natural gas liquids infrastructure, and export terminals.
Through its integrated value chain, Pembina strives to provide safe, reliable energy solutions that connect producers with consumers across the globe. The company is committed to supporting the transition to a more sustainable future, benefiting its customers, investors, employees, and communities.
