Enbridge to sell US midstream business for $1.12 billion

May 9, 2018
Enbridge (US) Inc., an indirect subsidiary of Enbridge Inc., has agreed to sell Midcoast Operating LP and its subsidiaries to AL Midcoast Holdings LLC, an affiliate of ArcLight Capital Partners LLC, for $1.12 billion in cash.

Enbridge (US) Inc., an indirect subsidiary of Enbridge Inc., has agreed to sell Midcoast Operating LP and its subsidiaries to AL Midcoast Holdings LLC, an affiliate of ArcLight Capital Partners LLC, for $1.12 billion in cash.

The Midcoast businesses conduct the company's US natural gas and natural gas liquids gathering, processing, transportation and marketing businesses, serving basins in Texas, Oklahoma, and Louisiana.

Assets, in the East Texas, western Anadarko, and Barnett shale plays, consist of 11,200 miles of gas gathering and transportation pipelines, 2,075 MMcfd of gas processing capacity, and 1,330 MMcfd of treating capacity. The NGL logistics and marketing business includes ELTM LP and Enbridge Marketing (US) LP. Additional assets include 35% interest in Texas Express Pipeline, consisting of a 594-mile, 20-in. NGL pipeline and 35% interest in Texas Express Gathering, consisting of 115 miles of NGL pipelines and other NGL systems comprising the company’s Texas Express NGL pipeline system.

The sale is a step in the company’s “shift towards a pure regulated pipeline and utility model and positions us well to achieve our goal of selling $3 billion (Can.) in noncore assets in 2018,” said Al Monaco, Enbridge president and chief executive officer.

The deal includes the company’s wholly owned gathering and processing assets in Texas and Oklahoma, Monaco said, and proceeds from the sale will be used to strengthen the company’s balance sheet and “enhance the financial flexibility to fund our industry leading $22 billion (Can.) secured growth program.”

AL Midcoast said it intends to maintain Midcoast’s workforce and keep a Houston presence.

The deal is expected to close in the third quarter.