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Pembina (PBA) to Sell Key Access Pipeline System Interest

Pembina Pipeline PBA recently announced that it has signed a deal to sell 50% of its non-operated stake in the Key Access Pipeline System (“KAPS”) to the private equity firm, Stonepeak Partners LP, for consideration worth C$662.5 million.

KAPS is a twin-pipeline system designed to deliver natural gas liquids and condensates to liquid processing and storage hubs at Fort Saskatchewan. It is currently held by Pembina Gas Infrastructure (“PGI”), a joint venture owned 60% by Pembina Pipeline and 40% by KKR’s global infrastructure funds.

Per the terms of the sale agreement, PGI will continue to fund its share of KAPS project costs until the end of next year, an equity contribution estimated to reach C$50 million. On closing the transaction, PGI will receive cash proceeds of C$662.5 million, which will be used to pay off the debt related to KAPS construction funding.

The deal is subject to approval by a regulatory body and other closing conditions. It is anticipated to be closed in the first quarter of 2023.

Pembina also declared its updated 2023 adjusted EBITDA guidance of C$3.5 to C$3.8 billion and a 2023 capital investment program of C$730 million. PBA stated that the midpoint of the guidance reflects about a 5% increase in the adjusted EBITDA contribution from its fee-based business.

Founded in 1954, Pembina Pipeline Corporation is a Canada-based vertically integrated operator of energy infrastructure assets. Headquartered in Calgary, Alberta, the company is active throughout the hydrocarbon value chain, offering a complete range of midstream and marketing solutions. Pembina’s extensive network of conduits covers some of North America’s most prolific basins.

Pembina currently has a Zacks Rank #3 (Hold). Investors interested in the energy space might look at some better-ranked stocks — Halliburton HAL, Schlumberger SLB and Repsol REPYY — each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Halliburton’s 2022 earnings stands at $2.07 per share, which indicates an increase of about 91.7% from the year-ago profit of $1.08.

HAL beat estimates for earnings in three of the trailing four quarters, the average being around 5.5%.

The consensus estimate for Schlumberger’s 2022 earnings is pegged at $2.17 per share, suggesting an increase of about 69.5% from the year-ago profit of $1.28.

SLB beat estimates for earnings in three of the trailing four quarters, the average being around 12.7%.

The Zacks Consensus Estimate for Repsol’s 2022 earnings stands at $4.34 per share, up 120.3% from the year-ago earnings of $1.97.

The Zacks Consensus Estimate for REPYY’s 2022 earnings per share has been revised upward by about 9.9% over the past 60 days from $3.95 to $4.34.

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Schlumberger Limited (SLB) : Free Stock Analysis Report

Halliburton Company (HAL) : Free Stock Analysis Report

Repsol SA (REPYY) : Free Stock Analysis Report

Pembina Pipeline Corp. (PBA) : Free Stock Analysis Report

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