Enbridge spending US$1.5B for minority stake in Bakken pipeline system
Bakken system will deliver 470,000 barrels per day of crude between North Dakota, the US Midwest and the US Gulf Coast.
Oil & Gas
Enbridge Energy Partners
CALGARY — Enbridge Inc. and partner companies have struck a US$2-billion deal to buy about one-third ownership in a pipeline system that will carry crude oil from North Dakota to the US Midwest and the US Gulf Coast.
Calgary-based Enbridge will provide US$1.5 billion to its affiliate Enbridge Energy Partners, which will acquire a 27.6% indirect interest in the Bakken pipeline system
Ohio-based Marathon Petroleum will pay a further US$500 million for a 9.2% indirect stake in the system.
The Bakken system is expected to be deliver more than 470,000 barrels per day of crude. It will travel from the Bakken production areas in North Dakota to a point in Illinois southwest of Chicago and to Texas on the U.S. Gulf Coast.
The sellers are an affiliate of Energy Transfer Partners and Sunoco Logistics Partners LP.
Upon closing, an ETP-Sunoco joint venture will own a combined 38.5% of the system, affiliates of Phillips 66 will own 25% and an Enbridge-Marathon joint venture will own 36.75%.
Enbridge Inc., which manages the EEP limited partnership, is expected to provide US$1.5 billion of financing for its affiliate’s purchase when the deal closes.
The president of Enbridge Energy Partners, Mark Maki, says the investment will provide with access to “the best markets for our customers” and the potential for expansion if demand warrants.
He says the pipeline projects are expected to come into service by the end of 2016 and immediately add to EEP’s distributable cash flow, which is used to calculate payments to its investors.