Stonepeak is investing C$662.5m (€479m) to buy a 50% stake in a Canadian natural gas liquids pipeline system from a gas processing business owned by Pembina Pipeline and KKR’s global infrastructure funds.

Pembina Gas Infrastructure (PGI), which is owned 60% by Pembina Pipeline and 40% by KKR’s global infrastructure funds, said it has agreed to sell its interest in Key Access Pipeline System (KAPS) to Stonepeak.

Keyera will continue to own the remaining 50% of KAPS and operate the asset.

As part of the deal, PGI said it will continue to fund its share of the project costs under the current project scope until the end of 2023.

PGI said the C$662.5m proceeds expected from the deal will be used to repay drawn credit facilities associated with the KAPS construction funding.

KAPS is an approximately 560km dual pipeline system linking Montney and Duvernay production in Western Canada to Keyera’s fractionation and logistics assets in Fort Saskatchewan. The system is anchored by secure, long-term, take-or-pay revenues with a broad customer base that includes meaningful commitments from investment-grade counterparties. 

Anthony Borreca, senior managing director at Stonepeak, said: “We believe that North American hydrocarbons, particularly natural gas, will continue to be an important component of the global energy mix for the foreseeable future, especially as efforts to decarbonise East Asia continue – natural gas production growth in Western Canada will play a critical role in those efforts.

“In our view, this makes KAPS a strong fit for Stonepeak’s opportunities strategy. We look forward to working closely with Keyera and the KAPS team as a trusted partner who is committed to the responsible ownership of traditional hydrocarbon infrastructure that plays a critical role in the global energy transition.”

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