Enbridge selling key Saskatchewan pipeline system for $1-billion


Enbridge selling key Saskatchewan pipeline system for $1-billion


CALGARY — The Globe and Mail

Published Thursday, Sep. 29, 2016 7:45PM EDT

Last updated Thursday, Sep. 29, 2016 8:08PM EDT


Enbridge Inc. will sell a key Saskatchewan pipeline system for $1.075-billion as it looks for financial room to help it proceed with its massive takeover of Houston-based Spectra Energy Corp.

The deal announced late Thursday will see private midstream firm Tundra Energy Marketing Ltd. buy Enbridge’s South East Saskatchewan pipeline system – an asset that includes more than 1,600 kilometres of oil and liquids gathering pipelines, hundreds of kilometres of trunk line and four truck terminals. The regional pipeline system and facilities, formally owned by Enbridge Income Fund Holdings Inc., are located in Saskatchewan and southwest Manitoba.

Earlier this month, Calgary-based Enbridge announced it would take over Spectra Energy to create North America’s largest energy infrastructure company in a $37-billion deal. The transaction is expected to close in early 2017.

“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,” Enbridge chief financial officer John Whelen said in a news release on Thursday.

Proceeds from the sale will be used to fund growth projects including the Wood Buffalo Extension, Athabasca Twin and Norlite projects – which the Enbridge Income Fund said are expected to come into service and start generating cash flow next year.

Tundra Energy said the South East Saskatchewan system moves approximately 175,000 barrels of crude per day to Enbridge’s Mainline at Cromer, Man., where there is also an interconnection with Enbridge’s Bakken expansion pipeline.

However, the Bakken expansion pipeline – which enables the delivery of crude from North Dakota to the Mainline System – is excluded from the transaction.

Enbridge said it expects crude and natural gas liquids volumes will continue to flow onto the Enbridge Mainline through an ongoing agreement with Tundra Energy.

The deal, still subject to regulatory approvals, is expected to close later this year. All Enbridge employees currently working on the SE Saskatchewan System will be asked to join Tundra Energy, according to its news release.



About prosperitysaskatchewan

Consultant on Saskatchewan's natural resources.

Posted on September 30, 2016, in economic impact, oil, political. Bookmark the permalink. Leave a comment.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: