Canada’s Enbridge in C$4.3bn Sale of Upstream Gas Assets
Canadian midstream and pipeline company Enbridge said July 4 it has reached agreement to sell its western Canadian gas gathering and processing business (G&P Business) to Brookfield Infrastructure for C$4.31bn (US$3.28bn) in cash.
The assets include 19 natural gas processing plants and liquids handling facilities, with a total operating capacity of 3.3bn ft3/day, and 3,550 km of natural gas gathering pipelines. They serve producers in the Montney, Peace River Arch, Horn River and Liard basins in northwestern Alberta and northeastern BC.
“When combined with asset monetisations 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,” Enbridge CEO Al Monaco said. “With a total of roughly $7.5bn in asset monetisations announced in 2018, we have more than doubled our initial target of $3bn.”
Separate sale agreements have been reached covering facilities governed by provincial regulations and those regulated by the federal National Energy Board (NEB). The transactions related to the provincial facilities are expected to close in 2018, while those related to NEB-regulated facilities are anticipated to close in mid-2019, Enridge said.
The transaction will allow Enbridge to focus on its core businesses in oil and gas transmission pipelines and natural gas utilities. For Brookfield Infrastructure, Canada’s largest alternative-asset manager, the deal represents another step into the gas distribution business, which began in 2016 when it led a group of investors in the US$5.2bn acquisition of a 90% stake in a network of gas pipelines, storage facilities and processing plants from Brazil’s Petrobras and continued last month with its US$575mn acquisition of a 59% stake in Colombian gas distributor and retailer Gas Natural ESP from Spanish utility Gas Natural.
“This investment represents an exciting opportunity to invest in scale in one of North America’s leading gas gathering and processing businesses based in western Canada,” Brookfield Infrastructure CEO Sam Pollock said. “The business is strategically positioned for the continued development of the prolific Montney basin.”