Apollo-managed funds to buy 40% stake in Pembina Gas Infrastructure

Global alternative asset manager Apollo announced last week that certain funds it manages had agreed to acquire a 40% stake in Canada’s Pembina Gas Infrastructure (PGI) from funds managed by KKR. The price tag was not disclosed.

PGI is a gas-processing entity whose facilities are operated and managed by Pembina Pipeline. The latter will maintain its 60% interest in PGI and Apollo said the governance structure would remain unchanged upon closing of the transaction, which is expected by the end of the second quarter of 2026.

PGI was formed as a joint venture between KKR and Pembina in 2022 and has since grown into one of the largest independent gas processing platforms in Western Canada, according to the announcement. It now has a processing capacity of around 5bn cubic feet (141.6mn cubic metres) per day. The unit operates 23 gas processing plants, roughly 3,900 km (2,423 miles) of gathering pipelines and about 330,000 barrels per day (bpd) of natural gas liquids (NGL) extraction capacity.

The entity’s operations benefit from connectivity to major gas transmission networks in Western Canada. Apollo described it as “strategically positioned” to serve its customer base across the Montney and Duvernay trends, from central Alberta to northeast British Columbia.

“Having established PGI as a leading gas processing platform in Western Canada, we remain focused on continuing to grow the business and deliver for our customers,” stated PGI’s president and CEO, Heather Christie-Burns. She went on to say Apollo’s expertise in infrastructure and long-term orientation made it an “ideal partner for this next phase”.

Meanwhile, Pembina’s president and CEO, Scott Burrows, described PGI as a “cornerstone of Pembina’s integrated midstream platform and a critical piece of Western Canadian energy infrastructure”.

This comes as both Apollo and KKR – along with Blackstone – are also reported to be competing for a potential stake in the LNG Canada project in BC. On April 30, Reuters reported, citing three people familiar with the matter, as saying the three companies were the remaining bidders in an auction process being run by Shell, LNG Canada’s operator.

Any deal is expected to be valued well above $10bn, and potentially at up to $15bn, according to some of Reuters’ sources. The news service cited some of the sources as saying Shell planned to sell exposure in the existing first and planned second phases of the project to a single bidder. However, the sources added that Shell could end up retaining some or all of the stake.

Both Apollo’s acquisition of the PGI stake and the Reuters report illustrate growing interest in Western Canada’s natural gas industry.