Copyright of the Daily Oil Bulletin 2017
Enbridge Inc. And Enbridge Energy Partners Close Bakken Pipeline System Acquisition
Enbridge Inc. and Enbridge Energy Partners, L.P. announced today that the previously disclosed transaction to acquire an effective 27.6 per cent interest in the Bakken Pipeline System has closed as final conditions have now been met.
The System consists of the Dakota Access Pipeline and the Energy Transfer Crude Oil Pipeline projects, both of which will be operated by Energy Transfer Partners, L.P., and connects the prolific Bakken formation in North Dakota to eastern PADD II and the U.S. Gulf Coast. Construction of the Bakken Pipeline is well advanced and approximately 95 per cent complete.
"The project is expected to provide attractive risk-adjusted returns and is underpinned by a significant level of take-or-pay contracts with high credit quality counterparties," said Guy Jarvis, president, liquids pipelines and major projects. "It is expected to be immediately accretive to earnings and ACFFO per share, and we're pleased to be moving forward with this project. The Bakken Pipeline provides us with an attractive opportunity to participate in a competitive new transportation option enabling North American producers to access premium U.S. Gulf Coast markets. We also see strong potential for future investments in the System through low-cost expansions."
Enbridge will fund 100 per cent of the investment in the short-term through a US$1.5 billion bridge loan to EEP through one of its subsidiaries. This bridge loan will come from available liquidity and will remain in place until a joint funding arrangement with EEP is finalized as part of its ongoing strategic review, which is likely to be completed during the second quarter of the year. Joint funding terms could result in Enbridge permanently funding up to 75 per cent of the US$1.5 billion, which was previously factored into the company's financing plans.
Jarvis added: "Importantly, the System is being built and operated with what we believe are best in class pipeline safety measures. We look forward to working with our partners to ensure that the commitment to safe operations and maintenance of positive working relationships with all stakeholders along the right of way is a top priority."