Pembina Pipeline Income Fund (PIF_u.TO) agreed on Wednesday to buy Talisman Energy Inc's (TLM.TO) Cutbank natural gas-processing complex for C$300 million ($250 million) as it looks to expand into the sector as it diversifies its operations.
The Cutbank complex in central Alberta includes three gas-processing plants with a combined capacity of 360 million cubic feet per day and 300 km (186 miles) of pipelines that gather natural gas from producers' wells.
Pembina operates 8,000 km (500 miles) of pipelines in Western Canada capable of moving more than 700,000 barrels of oil and natural gas liquids a day.
The Cutbank assets will be the fund's first move into the gas-processing business and it expects its stake in the sector to grow.
"The acquisition will be accretive to unitholders and will diversify Pembina's interests," Bob Michaleski, the fund's chief executive, said in a statement, adding the purchase "provides potential organic and acquisition growth opportunities."
Talisman is selling off assets it no longer considers central to its business, as it looks to raise more than C$2 billion to pay down debt and concentrate its operations.
Pembina intends to pay for the acquisition with bank loans.
The deal is expected to close on June 2.
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