Enbridge Makes Progress in Quest to Become Pure-Play Pipeline, Utilities Business

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Researched by Industrial Info Resources (Sugar Land, Texas)--Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta) announced this week it has taken another step toward reducing debt and becoming a pure-play energy pipeline and utilities company by selling off its natural gas gathering and processing business in western Canada.

Industrial Info is tracking more than US$18 billion in active Enbridge projects in Canada and the U.S. that are in various stages of development. Industrial Info assesses the likelihood of each project moving forward as planned.

Click on the image at right for a graph showing Enbridge projects by North American market region.

Enbridge said on Wednesday it will sell its Canadian natural gas gathering and processing business in the Montney, Peace River Arch, Horn River and Liard basins in British Columbia and Alberta to Brookfield Infrastructure (NYSE:BIP) (Toronto, Canada) and its institutional partners for C$4.31 billion (US$3.28 billion). The assets include 19 natural gas processing plants and liquids handling facilities, with a total operating capacity of 3.3 billion cubic feet per day (Bcf/d) and 3,550 kilometers of natural gas gathering pipelines.

Enbridge Chief Executive Officer Al Monaco said in a press release that when combined with asset monetizations announced in May, the sale of the Canadian business "significantly advances our strategic priority of moving to a pure-play regulated pipeline and utility business model."

The sale of the provincially regulated facilities is expected to close in 2018, while the sale of the federally regulated facilities is anticipated to close in mid-2019, Enbridge said.

The sale also will significantly reduce Enbridge's debt load. Monaco said Enbridge has more than doubled its initial target of C$3 billion (US$2.3 billion) in asset monetizations for the year.

In May, Enbridge said its U.S. subsidiary had reached an agreement to sell Midcoast Operating, L.P., which includes gathering and processing assets in Texas and Oklahoma, to AL Midcoast Holdings, LLC (an affiliate of ArcLight Capital Partners LLC (Boston, Massachusetts)) for US$1.12 billion. That sale includes natural gas gathering, treating, processing and transportation, and NGL transportation, assets located in the East Texas, Western Anadarko, and Barnett shale plays, and a 35% interest in the 594-mile Texas Express natural gas liquids (NGL) pipeline and Texas Express Gathering, consisting of 115 miles of NGL pipelines and other NGL infrastructure.

Enbridge also announced in May that it had agreed to sell 49% of its interest in select renewable power assets for C$1.75 billion (US$1.33 billion). The transaction includes 49% interest in North American onshore renewable power assets as well as 49% of its interest in two German offshore wind projects by way of a deal with the Canada Pension Plan Investment Board (CPPIB).

In late June, the Minnesota Public Utilities Commission approved Enbridge's Line 3 oil pipeline replacement project along the company's preferred route through Minnesota. The $7 billion project will replace more than 1,000 miles of aging pipeline from Hardisty, Canada, to Superior, Wisconsin. For more information on the Clearbrook, Minnesota, section, see Industrial Info's project report. For related information, see May 14, 2018, article - Enbridge Hopes to See Preferred Route for Line 3 Replacement Chosen in Minnesota.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.