Gibson Energy Inc. and Baytex Energy Corp. have entered a strategic partnership in the Pembina Duvernay along with the execution of a long-term take-or-pay agreement.

Under an initial 10-year agreement, Gibson will invest approximately CA$50 million (US$34.77 million) of capex and receive an area of dedication from Baytex, Gibson said in a press release.

Eric T. Greager, Baytex president and CEO, said the partnership includes construction and operation of midstream infrastructure. Baytex, which is building the infrastructure, is expected to complete construction by fourth-quarter 2025.

"This partnership allows us to leverage Gibson's liquids infrastructure and midstream expertise while maintaining operatorship," Greager said.

Baytex Duvernay assets
(Source: Baytex Energy)

The partnership expands Gibson’s liquids infrastructure footprint and increases committed volumes to its core Edmonton, Canada, terminal through an area dedication, enhancing the quality of cash flows, Gibson said in a March 11 press release.

"Building on our long-standing relationship, this strategic partnership leverages our infrastructure expertise, differentiated services and superior connectivity at our Edmonton terminal to create mutual value," said Gibson President and CEO Curtis Philippon. "Moving forward, we see the opportunity for further expansion of our partnership with Baytex to support their development plans and potential to work with other customers to explore additional purpose-built solutions which increase long-term demand for services at our core terminal assets."

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