Enbridge Inc. has agreed to sell its South Prairie liquids pipelines to Tundra Energy Marketing Ltd. for C$1.075 billion (US$814 million) as part of its strategy to finance the recent $28 billion acquisition of Spectra Energy Corp.
The assets include liquids pipelines and related facilities in southeast Saskatchewan and southwest Manitoba, as well as the Saskatchewan Gathering and Weyburn gathering systems and the Westspur trunk line. Not included is the Bakken Expansion Pipeline, which enables delivery of crude oil production in North Dakota to the Mainline System at Cromer, Manitoba.
“In conjunction with the proposed Spectra Energy merger, we announced our intention to divest of approximately $2 billion of non-core assets over the next year to further strengthen Enbridge Inc.’s consolidated balance sheet and provide for additional financing flexibility,” John Whelen, Enbridge’s executive vice president and CFO, said in a prepared statement. “The sale of these regional gathering pipelines by the fund not only provides an efficient source of financing for the fund’s organic growth program, but also immediately addresses about one-half of our monetization target while displacing equity that we would otherwise need to raise through the issuance of new capital.”
Shipper commercial arrangements and contracts are expected to remain in place, the company said, and crude oil and NGL volumes delivered from those assets are expected to continue to flow onto the Enbridge Mainline at Cromer.
Also on Sept. 29, Bloomberg reported that Canadian Prime Minister Justin Trudeau’s government gave itself a two-month window to decide on Enbridge’s Northern Gateway oil pipeline after declining to appeal a legal ruling that revoked its construction permits.
A cabinet order dated Sept. 23 enacted Natural Resources Minister Jim Carr’s recommendation to set the Nov. 25 deadline for a decision on how to proceed with Gateway. Trudeau also has to decide on Enbridge’s Line 3 project on or before that same day.
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