Enbridge Inc.’s indirect subsidiary, Enbridge (U.S.) Inc., has entered into a definitive agreement to sell Midcoast Operating and its subsidiaries (Midcoast), 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, an affiliate of ArcLight Capital Partners, for $1.12 billion, subject to customary closing adjustments.
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 C$3 billion [$2.3 billion] in noncore assets in 2018,” said Al Monaco, president and CEO 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 C$22 billion [$17.1 billion] secured growth program.”
The Midcoast businesses include natural gas gathering, treating, processing and transportation, and NGL transportation, 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 (including ELTM, L.P. and Enbridge Marketing (U.S.) L.P.); and a 35 percent interest in Texas Express Pipeline, consisting of a 594-mile, 20-inch NGL pipeline; and a 35 percent 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.
Enbridge will work with AL Midcoast to ensure a safe transition of Midcoast’s operations.
Citi acted as financial adviser and Norton Rose Fulbright US LLP acted as legal adviser to Enbridge on the transaction.
