Enbridge selling US natural gas pipeline business for $1.1 billion

This map depicts some assets owned or under development by Enbridge Photo: U.S. Government

Midcoast business include natural gas gathering, treating, processing and transportation…assets located in East TexasWestern Anadarko, Barnett shale plays

Enbridge Inc.  announced its indirect subsidiary, Enbridge (U.S.) Inc., has entered into a definitive agreement to sell Midcoast Operating, L.P. and its subsidiaries (Midcoast), which conducts the U.S. natural gas and natural gas liquids (NGL) gathering, processing, transportation and marketing businesses, according to a press release. The buyer is to AL Midcoast Holdings, LLC (AL Midcoast) and the cash purchase price is US$1.120 billion.

The company serves established basins in TexasOklahoma and Louisiana.

The transaction is expected to close in the third quarter of 2018, subject to receipt of customary regulatory approvals and satisfaction of other customary closing conditions.

“The sale of Midcoast is an important step in our shift towards a pure regulated pipeline and utility model, and positions us well to achieve our goal of selling CAD$3 billion in non-core assets in 2018. This transaction includes our 100-percent-owned gathering and processing assets in Texas and Oklahoma,” said Enbridge CEO Al Monaco.

“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 natural gas gathering, treating, processing and transportation, and NGL transportation, assets located in the East TexasWestern 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.

The business also consists of a NGL logistics and marketing business (including ELTM, L.P. and Enbridge Marketing (U.S.) L.P.), and a 35 per cent 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.

“I’d like to thank our colleagues at Midcoast who have done an exceptional job running the business safely and reliably day-in and day-out. This sale places great people and great assets in a strong position for future growth,” added Monaco.

AL Midcoast intends to maintain Midcoast’s workforce and anticipates that they will join AL Midcoast upon transaction close. AL Midcoast intends to retain a Houston presence.

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