Pembina Pipeline's Strategic Acquisition of Veren Assets
Pembina Pipeline to acquire Veren’s Gold Creek and Karr midstream assets
Pembina Pipeline Corporation (NYSE: PBA), a long-time operator in oil and gas storage and transportation, has announced a major deal through its joint venture, Pembina Gas Infrastructure Inc. (PGI). The transaction focuses on Veren Inc. (NYSE: VRN) and covers the purchase of Veren’s oil batteries in the Gold Creek and Karr areas—an investment aimed squarely at long-term, bricks-and-mortar infrastructure growth.
What the PBA–VRN agreement includes
The package includes four batteries in the Gold Creek and Karr regions, adding meaningful capacity to PGI’s network. Together, these facilities can handle up to 320 million cubic feet of natural gas per day, along with 53,000 barrels of liquids each day. Gas from these batteries feeds PGI’s Patterson Creek Gas Plant, which sits within Pembina’s broader Peace Pipeline system, keeping volumes inside one connected chain from field to market.
Veren, headquartered in Calgary, will play a central role in running the assets. Under the agreement, this Canadian exploration and production company will operate both the newly acquired batteries and PGI’s existing batteries nearby. In practice, that means VRN takes on day-to-day operations, costs, and maintenance, acting as the primary operator for these facilities and keeping one set of hands on the controls.
Deal value and expected returns
The total purchase price is C$400 million, with C$240 million attributable to Pembina. It’s a sizable outlay designed to expand Pembina’s processing and handling reach. The acquisition is expected to contribute an initial annual adjusted EBITDA of about C$50 million, with room to grow as capital is deployed to lift utilization at the facilities over time.
A 15-year commitment that underpins volumes
A key pillar of the deal is a 15-year take-or-pay agreement between Pembina and Veren. Through this long-term commitment, Veren agrees to use the processing capacity of the newly acquired batteries and to route its production through PGI’s gathering and processing services. The result is stability for PGI and clearer line of sight on volumes and cash flows.
The acquisition also deepens an existing relationship. Veren is a major operator in the Montney and Duvernay plays and brings more than 20 years of drilling inventory, aligning future development with PGI’s infrastructure footprint and Pembina’s downstream systems.
Streamlining contracts and integrating operations
The transaction simplifies legacy arrangements between Pembina and Veren. The acquired batteries and related assets are being rolled into a single, clearer contract framework—less administrative friction, longer-term commitments, and a structure built for steady operations.
At the same time, PGI is working to eliminate financial obligations linked to past agreements, reducing potential non-revenue capital. This strategic approach enhances financial exposure and helps ensure that capital investment flows toward projects that directly generate revenue.
Operationally, the split is straightforward: Veren manages upstream infrastructure, and Pembina continues to operate the Patterson Creek Plant. That alignment supports increased drilling activity consistent with VRN’s development plans, while making better use of existing PGI capacity—one system, working in step.
What’s next for Pembina’s growth path
The acquisition fits cleanly into Pembina’s growth strategy. Liquids from the new batteries and the Patterson Creek Gas Plant move along the Peace Pipeline system, while gas liquids are processed at Pembina’s Redwater Facility—keeping the value chain integrated and efficient.
PGI will fund the transaction using its established credit facility, reflecting a financing approach already in place. Closing is expected in the latter part of 2024, subject to regulatory approvals. Altogether, the deal strengthens Pembina’s position as a midstream service provider in Western Canada and adds capacity in areas that matter.
By bringing Veren’s Gold Creek and Karr batteries into the fold, Pembina gains scale and continuity where it counts—in gathering, processing, and moving hydrocarbons through a coordinated system. One network, one plan, more room to grow.
Frequently Asked Questions
1. Why is Pembina acquiring Veren’s Gold Creek and Karr assets?
To expand and streamline its midstream footprint. The batteries add material gas and liquids handling capacity, tie directly into PGI’s Patterson Creek Gas Plant, and align with Pembina’s Peace Pipeline system for a more integrated, long-term infrastructure platform.
2. What’s the purchase price, and how much is attributable to Pembina?
The total purchase price is C$400 million, of which C$240 million is attributable to Pembina. The structure reflects PGI’s role and Pembina’s share in the joint venture.
3. Who will operate the assets after closing?
Veren will operate both the new and existing PGI batteries in the area. VRN will oversee day-to-day operations, costs, and maintenance, serving as the primary operator under the agreement.
4. What are the expected financial contributions from the deal?
Pembina expects initial annual adjusted EBITDA of roughly C$50 million. There’s potential upside as capital investments drive higher utilization of the facilities over time.
5. When will the deal close, and how is it being financed?
Closing is anticipated in the fourth quarter of 2024, pending required approvals. PGI plans to fund the acquisition through its established credit facility.
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