Enbridge selling $516mn stake in Westcoast pipeline to indigenous groups

Canada’s Enbridge has struck a deal to sell a 12.5% stake in its Westcoast gas pipeline system to Stonlasec8 Indigenous Alliance, a group representing 36 First Nations in British Columbia, for CAD715mn ($516mn).

This is the latest of several deals that Enbridge has struck with First Nations in recent years. It is also the first deal to include financing from a new federal loan programme aimed at helping indigenous groups own stakes in resource projects.

The Canada Indigenous Loan Guarantee Corp. (CILGC) is providing Stonlasec8 a CAD400mn ($288mn) loan guarantee under the programme.

"This is truly a transformational transaction," Crown corporation Canada Development Investment’s president and CEO, Elizabeth Wademan, was quoted by the Canadian Press as saying. Canada Development Investment owns the CILGC.

"It actually represents the largest loan guarantee that will be issued ever, as well as the largest number of indigenous nations participating,” Wademan added.

The Westcoast pipeline spans more than 2,900 km (1,802 miles) in BC and has the capacity to carry up to 3.6bn cubic feet (102mn cubic metres) per day of gas.

“Much work lies ahead – but Canada’s energy landscape is being reshaped, step by step, by a commitment to the cause of economic reconciliation,” Enbridge stated, adding that together with Stonlasec8 it was paving the way. The company described the deal as “monumental” and the Westcoast system as an “essential piece of energy infrastructure”.

“Enbridge’s Westcoast pipeline system is a legacy asset that has operated within our traditional territories for over 65 years,” stated Stonlasec8’s president and chair, Chief David Jimmie, who is also Chief of Squiala First Nation. “Now, our nations will receive sustained economic benefits from this asset, funding critical investments in housing, infrastructure, environmental stewardship and cultural preservation. People often ask what economic reconciliation for indigenous peoples looks like. This is it.”

This comes after the CEOs of 14 energy companies, including Enbridge, wrote in a letter to federal political party leaders in March that increasing indigenous ownership in energy infrastructure was necessary if Canada was to expand its oil and gas industry and build pipelines.