VANCOUVER (miningweekly.com) – Dual-listed oil and gas logistics company Enbridge on Thursday announced that it has closed the $1.08-billion sale of liquids pipelines and related facilities in south-east Saskatchewan and south-west Manitoba to Tundra Energy Marketing.
The assets include the Saskatchewan and Weyburn gathering systems, as well as the Westspur trunk line. The assets do not include the Bakken expansion pipeline, which enables delivery of crude oil production in North Dakota to the Enbridge mainline system at Cromer, Manitoba.
"The sale of the assets at an attractive valuation provides an efficient source of financing for the Enbridge group, supporting its industry leading secured growth programme and displacing equity that we would otherwise need to raise through the issuance of new capital.
“It also represents about one-half of the target we set in September, in conjunction with the announcement of our planned acquisition of Spectra Energy, to monetise about $2-billion of noncore assets to strengthen the balance sheet and provide additional financing flexibility," stated Enbridge executive VP and CFO John Whelen.
Enbridge advised that the proceeds from the sale would be reinvested into organic growth projects of the vendor, TSX-listed Enbridge Income Fund Holdings (ENF), including the Wood Buffalo extension, Athabasca twin and Norlite projects.
"The proceeds from the sale are sufficient to meet all of the fund's currently anticipated equity capital requirements [for its organic growth programme] through to 2017, which supports our expected 10% annual increases in ENF's dividend through 2019," added ENF president Perry Schuldhaus.
Shipper commercial arrangements and contracts are expected to remain in place and Enbridge expects that crude oil and natural gas liquid volumes delivered from the pipelines will continue to flow onto the Enbridge mainline at Cromer.