Canada’s Enbridge is selling its gas-gathering and processing assets in Western Canada to Brookfield Infrastructure Partners for about C$4.31 billion (US$3.27 billion), as it shifts its focus to pipelines.
The midstream facilities are located in the Montney, Peace River Arch, Horn River and Liard basins of British Columbia and Alberta. They include 19 gas-processing plants and liquids handling facilities with a total operating capacity of 3.3 bcf (93.5 mcm) per day, and 3,550 km of gas-gathering pipelines, Enbridge said in a statement.
The cash transaction is still subject to gaining regulatory approvals.
The sale significantly advances the firm’s strategic priority of moving to a “pure play regulated pipeline and utility business model”, said Enbridge’s president and CEO, Al Monaco. Proceeds from the deal are should improve the company’s financing flexibility, Enbridge said.
RBC Capital Markets acted as financial adviser and Torys acted as legal advisers to Enbridge on the transaction.
Some of the facilities are governed by provincial regulations but others are governed by federal National Energy Board (NEB) regulations.
The transaction involving the sale of the provincially regulated facilities is due to close in 2018, while that involving the sale of the federally regulated facilities anticipated to close in mid-2019.
Calgary-based Enbridge said it would continue to hold its long haul regulated gas transmission assets, including the Westcoast transmission system in BC and the Alliance gas pipeline that runs from Western Canada to Chicago.
The acquisition “represents an exciting opportunity to invest in scale in one of North America’s leading gas-gathering and processing businesses”, said Brookfield Infrastructure’s CEO, Sam Pollock, according to a separate statement.
“The business is strategically positioned for the continued development of the prolific Montney Basin,” he added.
Brookfield has assets in the utilities, transport, energy and communications infrastructure sectors located in North and South America, Asia-Pacific and Europe. It is a subsidiary of Brookfield Asset Management.