|Bid||49.36 x 0|
|Ask||49.37 x 0|
|Day's Range||49.07 - 49.69|
|52 Week Range||39.15 - 50.65|
|Beta (3Y Monthly)||1.23|
|PE Ratio (TTM)||16.28|
|Forward Dividend & Yield||2.40 (4.90%)|
|1y Target Est||N/A|
Oil prices plunged on Friday morning as China announced new tariffs on U.S. crude oil, the first time that U.S. oil exports have been brought into the trade war
The deal values the Canadian subsidiary at approximately $1.73 billion, with Kinder Morgan's 70 percent stake representing about $935 million, and the U.S. portion of the pipeline at nearly $1.55 billion.
Kinder Morgan (KMI) announced that it agreed to sell the US portion of Cochin Pipeline and its 70% stake in Kinder Morgan Canada Ltd. to Pembina Pipeline.
A company based in Calgary, Canada, will pay $1.55 billion for the pipeline and $1.73 billion for the subsidiary.
(Bloomberg) -- Pembina Pipeline Corp. increased its bet on the future of Canada’s turbulent oil-sands industry, agreeing to buy Kinder Morgan Inc.’s Canadian unit and the U.S. portion of a key pipeline for about C$4.35 billion ($3.3 billion).The deal makes Pembina a major player in the oil-storage business, giving it 10 million barrels of capacity in the crude complex near Edmonton, Alberta, a key hub for oil-sands producers. With the takeover of Kinder’s Cochin Pipeline system, Pembina also becomes a key provider of the condensate that oil-sands companies need to blend with their thick crude to enable it to flow through pipelines.The acquisition is a major bet on the future of the oil sands at a time when delays to key export pipelines have hampered the industry’s ability to expand and forced the Alberta government to support Western Canadian heavy crude prices with unprecedented production limits, which it extended for another year on Tuesday. The deal also continues a flight of international capital out of the oil sands, following major divestitures from ConocoPhillips and Royal Dutch Shell Plc in recent years.Pembina Chief Executive Officer Mick Dilger said the deal increases its vertical integration, diversifying its offerings to its oil-sands customers and enhancing the company’s resilience in an uncertain environment. The takeover also gives Pembina additional integration opportunities, and those benefits are reflected in the premium it paid for the assets, Chris Cox, an analyst at Raymond James, said in a note.“The acquisition further strengthens the quality of the company’s integrated value chain, improves the quality of the company’s cash flows and adds a new compelling business line with the Edmonton storage business,” Cox said.For Kinder Morgan, the agreement comes more than three months after the Canadian unit said it would continue as a standalone company. It held two bidding rounds, “but ultimately concluded that a transaction on satisfactory terms was not available at the current time,” Steve Kean, CEO of both Kinder Morgan and the Canadian unit, told investors on a May conference call.The transaction values Kinder Morgan Canada Ltd. at about C$2.3 billion, or C$15.02 per share, based on an all-share exchange ratio of 0.3068 of a common share of Pembina per Kinder Canada security, according to a statement. That’s about 37% more than the stock’s closing price on Tuesday. It values the U.S. portion of the Cochin pipeline at about C$2.05 billion for cash consideration.Pembina fell as much as 1.8% to C$48.37 on Wednesday before paring losses. Kinder Morgan Canada jumped as much as 35% to C$14.84.Before the deals were announced early Wednesday, there was speculation that Kinder Morgan Canada could be a potential buyer for the Trans Mountain pipeline that runs from Alberta to Vancouver. The government bought the line from Kinder last year and has promised to sell the conduit back to a private company after it completes a long-delayed expansion project. Multiple indigenous groups in Canada have expressed interest in buying a stake in the line, and analysts have said the line also might be a good fit for pension funds.Pembina’s Dilger said on the conference call that the Trans Mountain line would fit into the company’s strategy of serving western Canadian oil producers but that the company doesn’t want to take on the baggage that comes along with the project, which has faced opposition and legal challenges from environmentalists, indigenous groups and British Columbia’s government.Though Pembina is “uniquely qualified” to operate Trans Mountain, “we don’t want to submerge our entire management team and subject our entire organization and reputation to all the noise that entails,” Dilger said on a conference call to discuss the transaction.Pembina also confirmed that another party has a right of first refusal on one of the assets it acquired. The company wouldn’t disclose the party or the asset, but Dilger said on a call to discuss the deal that if that right of first refusal were to be exercised, it would shrink the size of the assets Pembina is buying “a little bit” but would not be “devastating.”(A previous version of this story corrected the stock decrease in the fifth paragraph.)\--With assistance from Brian Eckhouse.To contact the reporter on this story: Kevin Orland in Calgary at firstname.lastname@example.orgTo contact the editors responsible for this story: James Herron at email@example.com, Christine Buurma, Carlos CaminadaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Years of delay in building new pipelines have led to Western Canada's oil production outpacing takeaway capacity and driven up demand for storage tanks. Pembina's deal follows an unsolicited bid for rival Inter Pipeline Ltd , highlighting growing interest in the midstream business of transporting and storing crude. The sale of Kinder Morgan Canada, whose parent is Houston-based Kinder Morgan Inc , also represents the exit of another foreign company from Canada's oil sector.
Canada's Pembina Pipeline Corp has agreed to buy Kinder Morgan Canada and the U.S. portion of the Cochin pipeline for C$4.35 billion ($3.28 billion), bulking up its storage resources in Canada. Years of delay in building new pipelines have led to Western Canada's oil production outpacing takeaway capacity and driven up demand for storage tanks. Pembina's deal follows an unsolicited bid for rival Inter Pipeline Ltd, highlighting growing interest in the midstream business of transporting and storing crude.
Shares of Kinder Morgan Inc. rallied 2.9% in premarket trading Wednesday, after the energy transportation and storage company announced a deal to sell the U.S. portion of the Cochin Pipeline for $1.55 billion to Pembina Pipeline Corp. . As part of the deal, Pembina has agreed to buy all of the outstanding common stock of Kinder Morgan Canada Ltd. , of which Kinder Morgan owns a 70% stake. Kinder Morgan will receive 0.3068 shares of Pembina for each Kinder Morgan Canada share it owns, which will result in Kinder Morgan receiving 25 million shares of Pembina stock, or just under 5% of the shares outstanding. Based on Tuesday's closing price of the U.S.-listed Pembina stock, that would be worth about $923.8 million. The deals are expected to close late in the fourth quarter or in the first quarter of 2020. Kinder Morgan initially expects to use the proceeds to pay down debt. Kinder Morgan's stock has soared 31% year to date through Tuesday, while the SPDR Energy Select Sector ETF has edged up 0.8% and the S&P 500 has gained 16%.
Oil and gas pipeline company Kinder Morgan said it will sell the U.S. part of its Cochin pipeline to Pembina Pipeline in a cash-and-stock deal. Kinder will get around $1.6 billion in cash as well as 25 million shares of Pembina, valued at close to $925 million. In addition, Pembina will purchase all outstanding shares of Kinder Morgan Canada Limited.
WINNIPEG, Manitoba/CALGARY, Alberta (Reuters) - A recent unsolicited bid for Inter Pipeline Ltd has highlighted the potential of Canada's midstream companies to offer insulation from volatile oil prices. Inter Pipeline, Pembina Pipeline Corp and Keyera Corp own key infrastructure such as gathering pipelines, gas-processing plants and storage tanks that are in high demand, and reported record second quarter profits.
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As federal energy regulators began four days of public comment sessions on the Jordan Cove liquefied natural gas project, the developer boasted Monday that 82 percent of landowners along a 229-mile pipeline route have signed voluntary easement agreements. Pembina Pipeline Corp., the parent company of the Jordan Cove project, called that a sign that "the quiet majority of citizens" in the region support the controversial project.
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