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Enbridge to Sell Alliance, Aux Sable Stakes For $3.1 Billion

Enbridge Inc. has agreed to sell its ownership interests in the Alliance pipeline and the Aux Sable gas processing facility to Pembina Pipeline Corp. for a total of $3.1 billion. The Alliance pipeline, which spans a distance of 3,848 kilometers, extends southeast from British Columbia (B.C.).

Specifically, the Alliance pipeline is a 3,848-kilometer conduit that runs from B.C. to Chicago’s Aux Sable, a significant natural gas liquids processing facility in North America.

Enbridge presently holds a 50 percent stake in Alliance and a 42.7 percent interest in Aux Sable, while Pembina Pipeline owns the remaining 50 percent of Alliance and an identical 42.7 percent share in Aux Sable.

As part of this transaction, Pembina, which currently operates Aux Sable, will assume sole operational control of Alliance.

Enbridge has indicated that the proceeds from this sale will be used to partially fund its previously announced $14 billion acquisition of three U.S.-based gas utilities from Dominion Energy, headquartered in Virginia. This acquisition, revealed in September, is anticipated to be finalized next year and will result in Enbridge significantly expanding its gas utility business by acquiring the East Ohio Gas Company, Questar Gas Company, related Wexpro entities, and the Public Service Company of North Carolina.

Pembina, on its part, has stated that this acquisition will enhance its exposure to natural gas and natural gas liquids, further establishing its presence and reputation in the U.S. market.

Pembina has also pointed out that supply and demand projections for the North American natural gas market are favorable for both Alliance and Aux Sable. The expected completion of LNG Canada, along with a projected substantial expansion of U.S. Gulf Coast LNG (liquefied natural gas) export capacity, is expected to drive increased demand for natural gas transportation.

The purchase price of $3.1 billion includes the assumption of $327 million in debt.

This transaction is subject to regulatory approval and is anticipated to close in the first half of 2024.

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