Mr. John Whelen reports
ENBRIDGE INC. ANNOUNCES $1.075-BILLION SALE OF SOUTH PRAIRIE REGION ASSETS
Enbridge Inc. and an affiliate of Enbridge Income Fund Holdings Inc. have entered into an agreement for the sale of the fund's liquids pipeline assets in the south Prairie region to Tundra Energy Marketing Limited (TEML) for $1.075-billion in cash. Closing of the transaction is expected to occur around the end of the fourth quarter of 2016 and is subject to customary closing conditions, including the Canada Transportation Act and Canadian Competition Act approvals.
"The monetization of these non-core assets at an attractive valuation provides a low-cost funding source for the Enbridge group and further supports Enbridge Inc.'s industry-leading cash flow and dividend growth outlook from our secured organic growth platform," said Enbridge executive vice-president and chief financial officer John Whelen. "The transaction is accretive to the fund group's available cash flow from operations on a per unit basis," added Mr. Whelen.
"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," noted Mr. Whelen. "The sale of these regional gathering pipelines by the fund not only provides an efficient source of financing for the fund's organic growth program, but also immediately addresses about one-half of our monetization target while displacing equity that we would otherwise need to raise through the issuance of new capital."
The assets being sold are liquids pipelines and related facilities in southeast Saskatchewan and southwest Manitoba, and include the Saskatchewan gathering 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 mainline system at Cromer, Man.
As part of the purchase and sale agreement, shipper commercial arrangements and contracts are expected to remain in place and it is expected that crude oil and NGL volumes delivered from the assets will continue to flow onto the Enbridge mainline at Cromer.
About Enbridge Inc.
Enbridge Inc., a Canadian company, exists to fuel people's quality of life, and has done so for more than 65 years. A North American leader in delivering energy, Enbridge operates the world's longest crude oil and liquids transportation system across Canada and the United States, and has a significant and growing involvement in natural gas gathering, transmission, and mid-stream business, as well as an increasing involvement in power transmission.
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