Canadian firm Enbridge has signed deals to sell its midstream and renewable assets for $2.47bn, as part of its efforts to reduce debt.
Image: Enbridge intends to reduce its debt with the sale of its midstream assets. Photo: courtesy of supakitmod/FreeDigitalPhotos.net.
The midstream assets included in the sale are the company’s natural gas and natural gas liquids (NGL) gathering, processing, transportation and marketing businesses in th US.
The firm has agreed to sell Midcoast Operating and its subsidiaries, , which conducts Enbridge’s midstream operations, to AL Midcoast, an affiliate of ArcLight Capital Partners for $1.120bn.
Midcoast is engaged in natural gas and natural gas liquids (NGL) gathering, processing, transportation and marketing businesses with operations in Texas, Oklahoma and Louisiana.
Planned to be completed in the third quarter of 2018, the deal is subject to receipt of customary regulatory approvals and satisfaction of other customary closing conditions.
Enbridge president and CEO Al Monaco said: “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 C$$3bn in non-core assets in 2018.
“This transaction includes our 100-percent-owned gathering and processing assets in Texas and Oklahoma. Proceeds from the sale will be used to accelerate the strengthening of our balance sheet and enhance the financial flexibility to fund our industry leading C$$22bn secured growth program.”
Enbridge has also signed an agreement to sell 49% stake in most of its wind and solar power assets to the Canada Pension Plan Investment Board (CPPIB) for C$1.75bn ($1.35bn).
As part of the deals, CPPIB will acquire Enbridge’s 49% interest in select North American onshore renewable power assets, as well as 49% stake in its two German offshore wind projects.
CPPIB Power and Renewables head, managing director Bruce Hogg said: “Through this investment, we are able to gain immediate exposure to a high-quality portfolio of wind and solar assets across diversified energy markets in North America and Europe, further advancing our global power and renewables strategy.”
Concurrently, CPPIB and Enbridge have agreed to form a 50-50 joint venture to pursue European offshore wind projects, which are may be in the early development, late development, construction or operational phase.
The two deals are scheduled to be completed during the third quarter of 2018, upon securing all necessary regulatory approvals and consents.