Enbridge to sell natural gas business to Brookfield for $4.3B

Enbridge Inc. has signed a deal to sell its Canadian natural gas gathering and processing business in the Montney, Peace River Arch, Horn River and Liard basins in B.C. and Alberta to Brookfield Infrastructure and its partners for $4.31 billion.

"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," Brookfield Infrastructure CEO Sam Pollock said in a statement Wednesday.

"The business is strategically positioned for the continued development of the prolific Montney Basin."

The midstream assets include19 natural gas processing plants and liquids handling facilities, with a total operating capacity of 3.3 billion cubic feet per day and 3,550 kilometres of natural gas gathering pipelines.

Company selling non-core assets to reduce debt

The Calgary-based Enbridgehas been selling non-core assets in an effort to reduce debt.

Chief executive Al Monaco said that, with $7.5 billion in deals announced this year, the company has more than doubled its initial target of $3 billion.

In May,Enbridgesigned:

• A$1.75-billion agreement with the Canada Pension Plan Investment Board to sell a 49 per cent stake in most of its wind and solar power assets.
• A$1.44-billion deal to sellMidcoastOperating LP to an affiliate of private equity firmArcLightCapital PartnersLLC.

Enbridgehas said it will continue to hold its long-haul regulated natural gas transmission assets, which include theWestcoasttransmission system in British Columbia and the Alliance pipeline that carries natural gas from Western Canada to the Chicago market.

The deal announced Wednesday is expected to close in two phases, with the facilities subject to provincial regulation expected to close this year and those under federal rules anticipated to close in mid-2019.

Sale a 'vote of confidence' in LNG

Hal Kvisle, the former CEO of TransCanada, said the sale was a wayto help Enbridge accomplish two major goals: lower debt and focus on long-distance pipelines.

And, he said, it was a savvy acquisition for Brookfield.

"I think they just saw the size and scope of this gas gathering and processing business and they bid aggressively and won it," Kvisle said. "The Montney is an extraordinary development."

He said the sale is a significant onefor Canada's liquified natural gas market, which he argued has both economic and environmental benefits.

"I think Enbridge selling this asset to Brookfield ... isa real vote of confidence not just to the Montneybut to the LNG business."

• MORE ECONOMIC NEWS |Trans Mountain outlines construction plan for next 6 months in Alberta, B.C.
• MORE ECONOMIC NEWS |Why Calgary's downturns tend to be 'mancessions'
• Readmorearticles byCBCCalgary, like us onFacebookfor updates and subscribe to ourCBC Calgarynewsletterfor the day's news at a glance.