Pembina Pipeline has agreed to acquire the 700km Vantage pipeline system and Mistral Midstream’s stake in the Saskatchewan ethane extraction plant (SEEP) for $650m from certain entities affiliated with Riverstone.
The 40,000bpd Vantage pipeline starts in Tioga, North Dakota, and terminates near Empress, Alberta.
The pipeline connects ethane supply from the North Dakota Bakken area to the petrochemical market in Alberta.
Pembina said Vantage offers long-term, fee-for-service cash flow and strategic access to the North Dakota Bakken area for future natural gas liquids (NGL) opportunities.
SEEP is a development-stage, 60 million cubic feet per day deep cut gas processing facility, which will serve the south-east Saskatchewan Bakken region.
The pipeline infrastructure features a 105km, four-inch ethane pipeline and a 75km gas gathering pipeline, both of which are currently under construction.
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By GlobalDataSEEP, which is estimated to produce around 4,500bpd of ethane, will link into Vantage via an under-construction pipeline lateral.
Pembina expects SEEP and the related pipeline lateral to start services in mid-2015.
Pembina president and CEO Mick Dilger said: "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."
The transaction, which is subject to regulatory approvals, is expected to be completed in the fourth quarter of 2014.
