Pembina Pipeline Corp. said April 20 it completed its acquisition of the Musreau Complex and related midstream assets in the Alberta Deep Basin.
In the deal, Pembina acquired certain sour natural gas processing assets from Paramount Resources Ltd. for C$556 million (US$440 million). Pembina funded the transaction through net proceeds from its equity share offering, which closed in March, and its recently increased C$2.5 billion credit facility.
The acquisition will add 250 million cubic feet per day (MMcf/d) of processing capacity in one of Pembina’s core areas. In total, Pembina’s gas services business’ processing capacity will increase to more than 1.7 Bcf/d.
Pembina expects to be one of the largest third-party gas processors serving the Western Canadian Sedimentary Basin, the release said.
The acquired assets include Paramount’s recently constructed Kakwa sour natural gas processing complex and associated infrastructure including gas gathering pipelines, sales gas pipeline and future disposal wells. Pembina also gains Paramount’s preliminary engineering studies, licenses and surface rights for the future construction of a sour natural gas processing facility, the release said.
In connection with the closing of the sale, Paramount has cancelled C$400 million of the C$900 million tranche A of its bank credit facility. The company also cancelled the entire C$100 million tranche B of the facility, which has never been drawn.
Proceeds from the sale were used by Paramount to pay down the facility. Following closing, about C$135 million was drawn. Paramount also has about C$152 million in letters of credit outstanding.
Paramount’s net debt is currently estimated to be about C$1.3 billion, 32% lower than year-end 2015, the release said.