Brookfield Asset Management’s infrastructure arm has led a group of investors to buy Enbridge’s Canadian midstream business for C$4.31bn (€2.80bn).
Brookfield Infrastructure said it is investing around $500m for a 30% stake in the Western Canadian natural gas gathering and processing business.
The business has an enterprise value of C$4.31bn.
Sam Pollock, the CEO of Brookfield Infrastructure, said: “This investment represents an exciting opportunity to invest in scale in one of North America’s leading gas gathering and processing businesses based in Western Canada.
“The business is strategically positioned for the continued development of the prolific Montney Basin.”
Cash flows from the business are anchored by a firm contract profile with a weighted average life of 10 years, Pollock said.
The Canadian Midstream Business includes 19 natural gas processing facilities with total operating processing capacity of 3.3bn cubic feet of gas a day and 3,550km of gathering pipelines, with connectivity to markets including the US Pacific Northwest, US Midwest and Western Canada.
Al Monaco, the president and CEO of Enbridge, said: “When combined with asset monetizations announced in May, the sale of our Canadian gas gathering and processing business significantly advances our strategic priority of moving to a pure play regulated pipeline and utility business model.
“It also demonstrates our focus on prudent capital allocation and ensuring the continued strength of our balance sheet and funding flexibility. With a total of roughly $7.5bn in asset monetizations announced in 2018, we have more than doubled our initial target of $3bn.”
Subject to conditions, the deal is expected to close in mid-2019.