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After the deal with Veresen, Pembina will own about 5.8 billion cubic feet per day of gas processing infrastructure across Western Canada by 2018.

Pembina’s portfolio includes an oil sands and heavy oil unit that operates about 1,650 kilometers of pipeline with capacity of about 975,000 barrels per day.

The company also has a 10,000 kilometre oil pipeline network, including expansions in the works, extending across Alberta and parts of British Columbia, Saskatchewan and North Dakota.

Veresen’s pipeline business made up over half of its asset base at 2016-end and has a stake in a pipeline delivering natural gas and NGL’s from Alberta, British Columbia and the midwest United states to the West Coast

It also holds interest in a 680-mile natural gas pipeline extending from Wyoming to Oregon, and owns the Alberta Ethane Gathering System, which is made up of three interconnected pipelines.

Pembina said Veresen shareholders could opt to get either 0.4287 of a Pembina share or $18.65 in cash.

The offer is at a 22.5 per cent premium to Pembina’s last close, the companies said.

Pembina said it would pay as much as about $1.52 billion in cash and 99.5 million in shares.

The company also said it would increase its dividend by 5.9 per cent upon deal close – expected late third quarter or early fourth quarter.

CIBC World Markets Inc is Pembina’s financial adviser. Blake, Cassels & Graydon LLP and Bracewell LLP are its legal advisers. Scotiabank is advising Veresen, while Osler, Hoskin & Harcourt LLP is providing legal counsel.

© Thomson Reuters 2017