North American energy infrastructure company Enbridge has signed an agreement to sell its Canadian natural gas gathering and processing business to Brookfield Infrastructure Partners and its institutional partners for C$4.31bn ($3.28bn).

Pipeline sunset.

Image: An oil and gas pipeline project. Photo: courtesy of outgunned21/

Under the terms of the agreement, Enbridge agreed to divest its assets in the Montney, Peace River Arch, Horn River and Liard basins in British Columbia (B.C.) and Alberta.

Enbridge president and CEO Al Monaco said: “When combined with asset monetizations announced in May, the sale of our Canadian G&P Business significantly advances our strategic priority of moving to a pure play regulated pipeline and utility business model.

“It also demonstrates our focus on prudent capital allocation and ensuring the continued strength of our balance sheet and funding flexibility. With a total of roughly $7.5 billion in asset monetizations announced in 2018, we have more than doubled our initial target of $3 billion.”

The assets considered for sale includes 19 natural gas processing plants and liquids handling facilities, with a total operating capacity of 3.3 Bcf/d and 3,550km of natural gas gathering pipelines.

The sale is part of the Enbridge’s efforts to reduce debt.

Brookfield Infrastructure CEO Sam Pollock said: “This investment represents an exciting opportunity to invest in scale in one of North America’s leading gas gathering and processing businesses based in Western Canada.  The business is strategically positioned for the continued development of the prolific Montney Basin.

“Cash flows from the business are anchored by a firm contract profile with a weighted average life of 10 years.”

Separately, Enbridge has signed sale agreements for facilities which are currently governed by provincial regulations (Alberta and B.C.), and those governed by federal National Energy Board regulations.

As per the deal, the firm will sell the provincially regulated facilities to undisclosed customer.

Enbridge expects proceeds from these deals to provide significant additional financing flexibility as it continues to execute on its current portfolio of secured growth projects.

Brookfield Infrastructure, part of Brookfield Asset Management, owns assets in the utilities, transport, energy and communications infrastructure sectors.