May 9, 2018
Enbridge (US) Inc. is selling Texas, Louisiana and Oklahoma assets to Boston-based energy infrastructure investor ArcLight Capital Partners LLC as part of an overall $2.5 billion sale, Enbridge said Wednesday.
Calgary-based Enbridge is selling off Midcoast Operating LP, its gas midstream unit, thereby unloading its US natural gas and NGL business, and is also selling some of its renewable energy assets.
Midcoast has natural gas gathering and transportation pipelines and a large processing and treating capacity along with a marketing arm.
The company also said it has a deal to sell its 49% stake in North American and European wind and solar farms to the Canada Pension Plan Investment Board, which has been picking up interests in wind and solar for months, including assets in Canada, Spain and Brazil.
As part of the new arrangement, the pension board and Enbridge will work together on new investments in Europe.
Enbridge says its the beginning move in its debt reduction plan, after stating a debt of nearly $61 billion at the end of last year.
The company bought Houston’s Spectra Energy last year for $28 billion, and has been under pressure to sell non-core assets — valued at about $10 billion — ever since.
The deal calls for Midcoast Operating — which processes and treats natural gas and natural gas liquids — to go to an affiliate of ArcLight for $1.12 billion.
Enbridge also has Canadian midstream assets worth about $2 billion it would like to sell, but told Reuters on Wednesday that it has not received any formal offers yet; there are also more renewables assets that could be for sale soon.
Enbridge President and CEO Al Monaco said Wednesday, “This transaction includes our 100-percent-owned gathering and processing assets in Texas and Oklahoma.
“Proceeds from the sale will be used to accelerate the strengthening of our balance sheet and enhance the financial flexibility to fund our industry leading CAD$22 billion secured growth program.”
“The Midcoast businesses include
(i) natural gas gathering, treating, processing and transportation, and NGL transportation, assets located in the East Texas, Western Anadarko, and Barnett shale plays and consist of approximately 11,200 miles of natural gas gathering and transportation pipelines, 2,075 million cubic feet per day (MMcf/d) of natural gas processing capacity, and 1,330 MMcf/d of treating capacity,
(ii) a NGL logistics and marketing business (including ELTM, L.P. and Enbridge Marketing (U.S.) L.P.), and
(iii) a 35 percent interest in Texas Express Pipeline, consisting of a 594-mile, 20-inch NGL pipeline, and a 35 percent interest in Texas Express Gathering, consisting of 115 miles of NGL pipelines and other NGL infrastructure comprising the Company’s Texas Express NGL pipeline system.”