Canadian E&P Whitecap Resources (WCP)’s  gas processing assets have lured in a pair of buyers in a pair of deals valued at a combined CA$520 million (US$352 million).
The company announced separate agreements with Pembina Pipeline (PBA) and Topaz Energy (TPZ) on July 2.

Pembina and Whitecap entered a strategic partnership that includes Pembina securing a 50% stake in a natural gas processing plant and dedicated natural gas volumes from Whitecap.

Pembina’s US$252 million acquisition expands its natural gas processing capacity in western Alberta, Canada, with a 50% stake in Whitecap’s Kaybob Complex, the companies said.

With the move, Pembina has positioned itself to support Whitecap’s development in the nearby Montney and Duvernay shales, according to Pembina Gas Infrastructure (PGI) President and CEO Chris Rousch. PGI is jointly owned by Pembina Pipeline Corp. and private equity firm KKR.

“These plays have significant growth potential, and we are proud to be Whitecap’s infrastructure partner,” Rousch said in a July 2 press release.

The Kaybob natural gas processing facility has a capacity of 165 MMcf/d of natural gas and condensate stabilization capacity of 15,000 bbl/d.

Whitecap will continue to operate the plant. Whitecap entered into a long-term take-or-play agreement to support future natural gas volumes feeding the plant and agreed to similar but smaller agreements with Pembina at Whitecap’s Cutbank Complex.

In addition, Pembina agreed to fund a Whitecap development in the Lator area, which includes a new battery and a lateral gathering pipeline that Pembina will own. In return, Whitecap will dedicate some natural gas volumes in the Lator area to Pembina’s pipeline network.

The deal will be paid for through Pembina’s existing credit facility and is expected to close in third-quarter 2024.

According to equity research firm TPH&Co, the Kaybob plant has processed an average of 121 MMcf/d of natural gas in 2024, including 108 MMcf/d processed in May, the last month with available data.

TPH rated the deal as favorable for Pembina, one of Canada’s primary midstream companies. The move strengthens PGI’s G&P position in developing shale basins and allows the company to add volume to its downstream assets.

“Overall, we view this deal as constructive for (PBA’s) outlook and hope to see more G&P deals that secure additional volumes as the basin sets up for incremental supply growth with LNG Canada, Woodfibre and Cedar set to come online over the next few years,” TPH said in its analysis.

Topaz transaction

Topaz will acquire a 50% working interest in one of Whitecap’s gas processing plants.
Under the deal, the midstream company paid $100 million for a 50% stake in Whitecap’s Musreau Facility, also in West Alberta.

Whitecap will continue operating the facility, which includes gas compression capacity of 43 MMcf/d and condensate stabilization of 12,500 bbl/d.

The plant was completed in March and provides service in the Montney Shale. Whitecap’s transaction with Topaz closed on June 24.

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