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

Enbridge has signed a deal to sell its Canadian natural gas gathering and processing business in B.C. and Alberta to Brookfield Infrastructure for $4.31 billion.

Assets include 19 natural gas processing plants and liquids handling facilities

Enbridge president and CEO Al Monaco waits to address the company's annual meeting in Calgary earlier this year. (Jeff McIntosh/The Canadian Press)

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 include 19 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 Enbridge has 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, Enbridge signed:

  • 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 sell Midcoast Operating LP to an affiliate of private equity firm ArcLight Capital Partners LLC.

Enbridge has said it will continue to hold its long-haul regulated natural gas transmission assets, which include the Westcoast transmission 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 way to 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 one for Canada's liquified natural gas market, which he argued has both economic and environmental benefits. 

"I think Enbridge selling this asset to Brookfield ... is a real vote of confidence not just to the Montney but to the LNG business."

With files from CBC Calgary