Enbridge Inc. announced Thursday that the company entered an agreement to sell 1,600 kilometres of pipeline in southeast Saskatchewan to Tundra Energy Marketing Limited (TEML) in a $1.075 billion cash transaction.
The Southeast Saskatchewan Pipeline System transports about 175,000 barrels of crude oil per day to Enbridge’s Mainline system in Cromer, Man.. The asset includes 547 kilometres of truck line, and four truck terminals.
According to Enbridge’s executive vice president and chief financial officer, John Whelen, this transaction is a part of Enbridge’s proposed merger with Spectra Energy.
“In conjunction with the proposed Spectra Energy merger, we announced our intention to divest of approximately $2 billion of non-core assets over the next year to further strengthen Enbridge Inc.’s consolidated balance sheet and provide for additional financing flexibility,” Whelen said in a statement.
The sale is expected to be approved near the end of 2016.
If approved, this sale would cover more than half of Enbridge’s divestment commitment.
All Enbridge employees currently working on the Southeast Saskatchewan Pipeline System are expected to become employees of the Calgary-based TEML at the end of the transaction.
Assets being sold include the Saskatchewan and Weyburn gathering systems. Enbridge said the Bakken Expansion Pipeline is not part of the transaction. This enables delivery of crude oil production in North Dakota to the Mainline System in Cromer.