Vantage Pipeline and Assets To Be Acquired by Pembina

Pembina Pipeline Corp. (Calgary) is acquiring the Vantage pipeline system and Mistral Midstream Inc.’s (Calgary) interest in the Saskatchewan Ethane Extraction Plant (SEEP) for a reported $650 million. The Vantage system, a 435-mile, 40,000-bbld, high-vapor-pressure pipeline originating in Tioga, N.D. and terminating near Empress, Alta., Canada, provides access to the Bakken play for future NGL opportunities.

Vantage links a growing supply of ethane from the Bakken to the petrochemical market in Alberta. It originates from a large-scale gas plant in Tioga, extends northwest through Saskatchewan, and terminates near Empress, Alta., where it is connected to the Alberta Ethane Gathering System pipeline.

As part of the transaction, Pembina is also acquiring pipeline infrastructure from Mistral Midstream and the company’s interest in SEEP, a development-stage, 60-MMcfd (54 MMcfd net to Pembina) deep-cut gas processing facility that is to serve the southeast Saskatchewan Bakken region. The pipeline infrastructure includes about 65 miles of 4-in. ethane pipeline and about 46 miles of gas-gathering pipeline, both of which are under construction. SEEP will receive liquids-rich gas produced from the Viewfield and Flat Lake gas plants and from a local system.

The facility is supported by a long-term ethane sales agreement and a processing agreement. SEEP is expected to produce about 4500 bbld of ethane and will connect into Vantage through a pipeline lateral that is under construction. Pembina expects SEEP and the associated pipeline lateral to be in service in mid-2015. “I am very happy to announce our agreement to acquire Vantage and SEEP,” said Mick Dilger, Pembina’s president and CEO. “We have watched the development of these assets with great interest as they represent an excellent opportunity to expand our footprint into one of the most promising hydrocarbon plays in North America, and, as such, the transaction is a low-risk, logical step-out for Pembina.”