Energy Transfer (NYSE:ET) agrees to sell its 51% stake in Energy Transfer Canada to a joint venture which includes participation by Pembina Pipeline (NYSE:PBA) and global infrastructure funds managed by KKR at a valuation of ~C$1.6B (US$1.3B) including debt.
Energy Transfer expects to see cash proceeds of ~C$340M (US$270M) from the sale, subject to purchase price adjustments.
The company says the deal allows it to "divest its high-quality Canadian assets at an attractive valuation to further deleverage its balance sheet and redeploy capital within its U.S. footprint."
Pembina Pipeline and KKR say they will combine their western Canadian natural gas processing assets into a single, new joint venture entity, which will include the Energy Transfer Canada business.
Pembina will serve as the JV's operator and manager, which also will include Pembina's field-based natural gas processing assets and the Veresen Midstream business; the company says the ascribed value of all the transactions total ~C$11.4B (US$9B).
The poor safety record of the Energy Transfer organization appears to be largest risk to the North Dakota and Illinois permits that have been revoked while the Dakota Access Pipeline is operating, Long Player writes in a bearish analysis posted recently on Seeking Alpha.