UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT
TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of September, 2014
Commission File Number: 001-35563
PEMBINA PIPELINE CORPORATION
(Name of registrant)
3800, 525 –
8th Avenue S.W.
Calgary, Alberta T2P 1G1
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F.
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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PEMBINA PIPELINE CORPORATION |
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Date: September 2, 2014 |
By: |
/s/ Scott Burrows |
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Name: Scott Burrows |
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Title: Vice President, Capital Markets |
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Form 6-K Exhibit Index
Exhibit
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Document
Description |
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99.1 |
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News Release Dated September 2, 2014 - Pembina Pipeline Corporation To Acquire Vantage Pipeline and an Interest in Associated Assets For US$650 Million
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Exhibit 99.1
Pembina Pipeline Corporation To Acquire Vantage Pipeline and an Interest in
Associated Assets For US$650 Million
Acquisition of Bakken ethane pipeline adds additional fee-for-service
pipeline infrastructure to Pembina's portfolio and establishes new growth platform
CALGARY, Sept. 2, 2014 /CNW/ - Pembina Pipeline Corporation ("Pembina"
or "the Company") (TSX: PPL; NYSE: PBA) is pleased to announce that it has entered into agreements to acquire the Vantage
pipeline system ("Vantage") and Mistral Midstream Inc.'s ("Mistral") interest in the Saskatchewan Ethane Extraction
Plant ("SEEP") for total consideration of US$650 million, subject to traditional closing adjustments, ("the Transaction")
from certain entities affiliated with Riverstone Holdings LLC (the "Seller").
Transaction Highlights
Vantage is a recently constructed, approximately 700 kilometre ("km"),
40,000 barrel per day ("bpd"), high vapour pressure pipeline that originates in Tioga, North Dakota and terminates near
Empress, Alberta. Vantage provides long-term, fee-for-service cash flow and strategic access to the prolific and growing North
Dakota Bakken play for future natural gas liquids ("NGL") opportunities. Key Transaction highlights include:
| · | Geographic Diversification: The Transaction provides geographic diversification
of Pembina's pipeline and midstream infrastructure, providing access to a new and prolific resource play in North Dakota. |
| · | Committed Volumes: Vantage is underpinned by a long-term, take-or-pay transportation
contract. |
| · | Expansion Opportunities: Vantage is sized to reach an ultimate capacity of
approximately 60,000 bpd through modest capital investment via the addition of two quarter point pump stations. |
| · | Cash Flow Per Share Accretion: The Transaction is expected to be neutral to
cash flow per share in 2015 and accretive in 2016 on the basis of minimum volumes currently under contract and a full year contribution
from SEEP. Pembina foresees the potential for significant accretion as additional volumes are secured. |
"I am very happy to announce our agreement to acquire Vantage and
SEEP," said Mick Dilger, Pembina's President and Chief Executive Officer. "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. We are excited to add this infrastructure
to our leading portfolio of pipeline assets. Not only will the Transaction augment our fee-for-service cash flow stream, but we
expect opportunities associated with both Vantage and SEEP to result in long-term shareholder value."
Description of Acquired Assets under the Transaction
Vantage links a growing supply of ethane from the prolific North Dakota
Bakken play to the petrochemical market in Alberta. It originates from a large-scale gas plant in Tioga, North Dakota extending
northwest, through Saskatchewan and terminating near Empress, Alberta, where it is connected to the Alberta Ethane Gathering System
("AEGS") pipeline.
As part of the Transaction, Pembina is also acquiring pipeline infrastructure
from Mistral and Mistral's interest in SEEP, a development-stage, 60 million cubic feet per day ("MMcf/d") (54 MMcf/d
net to Pembina) deep cut gas processing facility that is centrally located to service the southeast Saskatchewan Bakken region.
The pipeline infrastructure includes an approximately 105 km, four inch ethane pipeline and an approximately 75 km gas gathering
pipeline, both of which are currently under construction. SEEP will receive liquids-rich gas produced from the Viewfield and the
Flat Lake gas plants and from TransGas' local system. The facility is underpinned by both a long-term ethane sales agreement and
a long-term, fee-for-service processing agreement. SEEP is expected to produce approximately 4,500 bpd of ethane and will connect
into Vantage through a pipeline lateral that is also currently under construction. Pembina expects SEEP and the associated pipeline
lateral to be in-service in mid-2015.
Pembina anticipates incurring additional capital expenditures of approximately
C$100 million (net to Pembina) prior to the end of 2015 in connection with the Transaction in order to complete the construction
of SEEP and the associated gathering and delivery system.
Stuart Taylor, Pembina's Senior Vice President, NGL & Natural Gas
Facilities commented: "SEEP and its associated pipeline infrastructure are very attractive to Pembina. With these assets,
we'll be making a low-risk entry into the prolific Bakken play in Saskatchewan and we'll be adding another fee-for-service gas
plant to our portfolio."
Transaction Details
Pembina will acquire all the issued and outstanding shares of Vantage
Pipeline Canada ULC, Vantage Pipeline US LP and Mistral and repay Vantage's bank indebtedness of approximately US$224 million at
closing. Pembina intends to use cash of US$395 million and US$255 million in common shares to fund the Transaction. The Company
expects to fund a portion of the cash consideration with a bought-deal preferred share issuance and existing credit capacity. The
US$255 million common share portion will result in 5.61 million shares being issued to the Seller.
The Transaction is subject to regulatory approvals (including approval
of the National Energy Board and under the Competition Act (Canada) and the Canada Transportation Act) and other
customary closing conditions, including the approval of the Toronto Stock Exchange. The Transaction will have an effective date
of August 1, 2014, and is expected to close in the fourth quarter of 2014.
This news release does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not
be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state
securities laws or an exemption from such registration is available.
Advisors
CIBC is acting as exclusive financial advisor to Pembina, Blake, Cassels
& Graydon LLP is acting as Canadian legal counsel and Bracewell & Giuliani LLP is acting as US counsel.
About Pembina
Calgary-based Pembina Pipeline Corporation is a leading transportation
and midstream service provider that has been serving North America's energy industry for 60 years. Pembina owns and operates pipelines
that transport various hydrocarbon liquids including conventional and synthetic crude oil, heavy oil and oil sands products, condensate
(diluent) and natural gas liquids produced in western Canada. The Company also owns and operates gas gathering and processing facilities
and an oil and natural gas liquids infrastructure and logistics business. With facilities strategically located in western Canada
and in natural gas liquids markets in eastern Canada and the U.S., Pembina also offers a full spectrum of midstream and marketing
services that spans across its operations. Pembina's integrated assets and commercial operations enable it to offer services needed
by the energy sector along the hydrocarbon value chain.
Forward-Looking Statements & Information
This document contains certain forward-looking statements and information
(collectively, "forward-looking statements") within the meaning of the "safe harbor" provisions of applicable
securities legislation that are based on Pembina's current expectations, estimates, projections and assumptions in light of its
experience and its perception of historical trends. In some cases, forward-looking statements can be identified by terminology
such as "expects", "will", "expand", "would", "plans" and similar expressions
suggesting future events or future performance.
In particular, this document contains forward-looking statements, pertaining
to, without limitation, the following: the Transaction, including the expected closing date of the Transaction and the anticipated
benefits of the Transaction to Pembina; the planned capacity of SEEP; the anticipated capital expenditures related to Vantage and
SEEP; the expected in-service date of SEEP; expansion opportunities related to Vantage; the ongoing utilization and expansions
of and additions to Pembina's business and asset base, growth and growth potential. These forward-looking statements and information
are being made by Pembina based on certain assumptions that Pembina has made in respect thereof as at the date of this document
including those discussed below.
With respect to forward-looking statements contained in this document,
Pembina has made assumptions regarding, among other things: the ability of the parties to satisfy the conditions to closing of
the Transaction in a timely manner; ongoing utilization and future expansion, development, growth and performance of Pembina's
business and asset base; future demand for fractionation and transportation services; future levels of oil and natural gas development;
and potential revenue and cash flow enhancement; future cash flows.
Although Pembina believes the expectations and material factors and
assumptions reflected in these forward-looking statements are reasonable as of the date hereof, there can be no assurance that
these expectations, factors and assumptions will prove to be correct. Readers are cautioned that events or circumstances could
cause results to differ materially from those predicted, forecasted or projected. By their nature, forward-looking statements involve
numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts,
projections and other forward-looking statements will not occur, which may cause actual performance and financial results in future
periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking
statements and information. Risks and uncertainties inherent in the nature of the Transaction include the failure the parties to
satisfy the conditions to the Transaction, including required regulatory approvals, in a timely manner, or at all. Failure to so
obtain such approvals, or the failure to otherwise satisfy the conditions to the Transaction, may result in the Transaction not
being completed on the proposed terms, or at all.
None of the forward-looking statements described above are guarantees
of future performance and are subject to a number of known and unknown risks and uncertainties, including, but not limited to:
the failure to realize the anticipated benefits of the Transaction following closing due to integration issues or otherwise; the
impact of competitive entities and pricing; reliance on key industry partners, alliances and agreements; the strength and operations
of the oil and natural gas production industry and related commodity prices; the continuation or completion of third- party projects;
regulatory environment and inability to obtain required regulatory approvals; tax laws and treatment; fluctuations in operating
results; lower than anticipated results of operations and accretion from Pembina's business initiatives; reduced amounts of cash
available for dividends to shareholders; the ability of Pembina to raise sufficient capital (or to raise capital on favourable
terms) to complete future projects and satisfy future commitments.
The forward-looking statements contained in this document speak only
as of the date of this document. Pembina does not undertake any obligation to publicly update or revise any forward-looking statements
or information contained herein, except as required by applicable laws. The forward-looking statements contained in this document
are expressly qualified by this cautionary statement.
Pembina Pipeline® is a registered trademark of Pembina Pipeline
Corporation.
SOURCE Pembina Pipeline Corporation
%CIK: 0001546066
For further information:
Investor Inquiries:
Scott Burrows
Vice President, Capital Markets
(403) 231-3156
1-855-880-7404
e-mail: investor-relations@pembina.com
Media Inquiries:
Laura Lunt
Senior Manager, Regulatory, Environment & External Relations
(403) 231-7500
CO: Pembina Pipeline Corporation
CNW 07:40e 02-SEP-14
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