Enbridge transferring $1.76 billion in pipeline assets to affiliate
Deal includes segments of the Alliance and Southern Lights pipelines.
CALGARY — Enbridge Inc. will transfer $1.76 billion in pipeline assets to one of its affiliates.
The deal with Enbridge Income Fund includes its 50% interest in the US segment of the Alliance pipeline, which carries gas from northeastern BC and northwestern Alberta to the Chicago area, as well as the Southern Lights diluent pipeline, which transports the oil sands-thinning agent from the Chicago area to Edmonton.
Enbridge chief financial officer Richard Bird said this latest “drop down” deal will provide a “significant source of low-cost funding for our record growth capital program.”
After the transfer, Enbridge’s overall economic interest in the income fund will be 66.4%, through direct and indirect investments.
“We believe that the acquisition of the U.S. segment of the Alliance pipeline and the cash flows from the Southern Lights pipeline will be a great fit for the fund and is expected to deliver numerous benefits,” said fund president Perry Schuldhaus.
“The assets will substantially scale up and further diversify the fund’s sources of low risk cash flow.”
© 2014 The Canadian Press