Enbridge to sell its Canadian natural gas gathering & processing businesses for $4.31B
CALGARY, /PRNewswire/ - Enbridge Inc. (Enbridge or the Company) announced that it has entered into definitive agreements to sell its Canadian natural gas gathering and processing business in the Montney, Peace River Arch, Horn River and Liard basins in British Columbia (B.C.) and Alberta (the "G&P Business") to Brookfield Infrastructure and its institutional partners (collectively, "Brookfield") for a cash purchase price of CAN $4.31 billion, subject to customary closing adjustments and receipt of regulatory approvals.
The G&P Business includes 19 natural gas processing plants and liquids handling facilities, with a total operating capacity of 3.3 Bcf/d and 3,550 km of natural gas gathering pipelines.
"When combined with asset monetizations announced in May, the sale of our Canadian G&P Business significantly advances our strategic priority of moving to a pure play regulated pipeline and utility business model." said Al Monaco, President and Chief Executive Officer of Enbridge. It also demonstrates our focus on prudent capital allocation and ensuring the continued strength of our balance sheet and funding flexibility. With a total of roughly $7.5 billion in asset monetizations announced in 2018, we have more than doubled our initial target of $3 billion."
Separate sale agreements have been entered into for those facilities currently governed by provincial regulations (Alberta and B.C.), and those governed by federal National Energy Board regulations. The transaction involving the sale of the provincially regulated facilities is expected to close in 2018, while the transaction involving the sale of the federally regulated facilities is anticipated to close in mid-2019.
Proceeds from these transactions provide significant additional financing flexibility going forward as the Company continues to execute on its current portfolio of secured growth projects. The Company's outlook for DCF/share through 2020 and its target credit metrics remain unchanged as a result of these asset sales.
Enbridge will continue to hold its highly strategic long haul regulated natural gas transmission assets which include the Westcoast transmission system in British Columbia and the Alliance pipeline that carries natural gas from western Canada to the Chicago market.
Brookfield intends to maintain the Canadian G&P workforce and anticipates that they will remain with the G&P business upon transaction close.
"I'd like to thank our colleagues at the G&P Business, who have done an exceptional job building and expanding a substantial gathering and processing franchise while operating the business safely and reliably day-in and day-out." added Mr. Monaco. Enbridge will work with Brookfield to ensure a safe and orderly transition of the G&P business' operations.
RBC Capital Markets acted as financial advisor and Torys LLP acted as legal advisors to Enbridge on the transaction.
The US Energy Information Administration (EIA) reported in April that the US set records for natural gas production in 2017.
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