North American Oil & Gas Pipelines

JUN 2018

North American Oil & Gas Pipelines covers the news shaping the business of oil and gas pipeline construction and maintenance in North America, including pipeline installation methods, integrity management innovations and managerial strategies.

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Page 12 of 43 JUNE 2 018 | North American Oil & Gas Pipelines 13 Enbridge Selling Midcoast Operating Assets for $1.12 Billion Enbridge Inc. announced May 9 that its indirect subsid- iary, Enbridge (U.S.) Inc., has entered into a definitive agree- ment to sell Midcoast Operating LP and its related subsidiar- ies to AL Midcoast Holdings for $1.12 billion. Midcoast Operating conducts Enbridge's U.S. natural gas and natural gas liquids (NGL) gathering, processing, trans- portation and marketing businesses. Midcoast serves estab- lished basins in Texas, Oklahoma and Louisiana. Enbridge is selling Midcoast to AL Midcoast Holdings, which is an affiliate of ArcLight Capital Partners LLC, for a cash purchase price of $1.12 billion, subject to customary closing adjustments. 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 posi- tions us well to achieve our goal of selling $3 billion (CAD) in non-core assets in 2018," said Al Monaco, president and CEO of Enbridge. "This transaction includes our 100 percent owned gathering and processing assets in Texas and Okla- homa. Proceeds from the sale will be used to accelerate the strengthening of our balance sheet and enhance the finan- cial flexibility to fund our industry leading CA$22 billion secured growth program." The Midcoast businesses include: • Natural gas gathering, treating, processing and transportation, and NGL transportation assets located in the East Texas, Western 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 1.33 MMcf/d of treating capacity. • An NGL logistics and marketing business (including ELTM LP and Enbridge Marketing (U.S.) LP). • A 35 percent interest in Texas Express Pipeline, consisting of a 594-mile, 20-in. 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 reli- ably day-in and day-out. This sale places great people and great assets in a strong position for future growth," Monaco said. AL Midcoast intends to maintain Midcoast's workforce and anticipates that they will join AL Midcoast upon transac- tion close. AL Midcoast intends to retain a Houston presence. Enbridge will work with AL Midcoast to ensure a safe transi- tion of Midcoast's operations.

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