Enbridge Inc. has entered into a agreement to sell Midcoast Operating, L.P. and its subsidiaries, which conducts the Company’s U.S. natural gas and natural gas liquids gathering, processing, transportation and marketing businesses, serving established basins in Texas, Oklahoma and Louisiana, to AL Midcoast Holdings, LLC, for a cash purchase price of US$1.120bn. 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 positions us well to achieve our goal of selling CAD$3bn in non-core assets in 2018,” said Al Monaco, President and Chief Executive Officer of Enbridge. “This transaction includes our 100-percent-owned gathering and processing assets in Texas and Oklahoma. Proceeds from the sale will be used to accelerate the strengthening of our balance sheet and enhance the financial flexibility to fund our industry leading CAD$22bn secured growth program.”
The Midcoast businesses includes natural gas gathering, treating, processing and transportation, and NGL transportation, with 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 1,330 MMcf/d of treating capacity, a NGL logistics and marketing business, and a 35% interest in Texas express pipeline, consisting of a 594-mile, 20-inch NGL pipeline, and a 35% 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.