Page 6 - NorthAmOil Week 39 2022

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

Enbridge to sell stakes in seven pipelines

to indigenous groups for $828mn

CANADA CANADA’S Enbridge announced on September recycling capital at “attractive valuations”, it said.
28 that it had agreed to sell an 11.57% interest in “We believe this partnership exemplifies
seven pipelines to 23 First Nation and Metis indig- how Enbridge and indigenous communities
enous communities for CAD1.12bn ($828mn). can work together, not only in stewarding the
The company said the deal represents the larg- environment, but also in owning and operating
est energy-related indigenous economic part- critical energy infrastructure,” stated Enbridge’s
nership transaction in North America to date. president and CEO, Al Monaco.
A newly created entity, Athabasca Indigenous The pipelines included in the transaction are
Investments (Aii), will oversee the investment. the Athabasca, Wood Buffalo/Athabasca Twin
“The deal is significant because it gives all and associated tanks; Norlite Diluent; Waupi-
23 indigenous communities that are directly soo; Wood Buffalo; Woodland; and the Wood-
impacted by these assets a direct stake,” stated land extension. Enbridge, which will remain the
Aii’s president, Justin Bourque. operator of the pipelines, said the assets were
According to Bourque, cited in the Finan- underpinned by “long-life resources and long-
cial Post, the deal will be funded from a mix of term contracts, which provide highly predictable
non-recourse financing and an equity loan of cash flows”.
CAD250mn ($185mn) backed by a guarantee Analysts did not view the transaction as par-
from Alberta Indigenous Opportunities, which ticularly material to Enbridge, but did see it as a
finances indigenous communities seeking com- positive for the company’s relations with indige-
mercial partnerships. nous communities. For example, Bank of Nova
For Enbridge, the deal is part of its indigenous Scotia analyst Robert Hope said he expected
reconciliation action plan, which is aimed at more deals of this nature from Enbridge in the
improving relations with native communities and future, and said the agreement was a “slight pos-
employees. It also fulfils the company’s goal of itive” for the company.™
INVESTMENT

Kinder Morgan sells half its

stake in Elba Island LNG

GEORGIA KINDER Morgan announced on September 27 reduce its short-term debt and create additional
that it had closed the sale of a 25.5% interest in capacity for investments including “opportunis-
the Elba Liquefaction Co. (ELC) joint venture, tic” share repurchases.
which operates a liquefaction plant on Elba ELC delivers the LNG it produces to South-
Island in Georgia. The stake, which represents ern LNG (SLNG) for export. Kinder Morgan
half of Kinder Morgan’s interest in ELC, has also owns 100% of SLNG, which owns and
been sold to an undisclosed buyer for around operates the Elba Island LNG export terminal,
$565mn. including the LNG storage tanks and ship dock.
The price of the stake implies an enterprise The facility is supported by a 20-year contract
value of roughly $2.3bn for ELC, Kinder Morgan with Shell LNG, which is subscribed to 100% of
said, which it estimates is roughly 13 times 2022 Elba Island’s liquefaction capacity.
earnings before interest, taxes, depreciation and The transaction comes as global demand for
amortisation (EBITDA). Blackstone Credit holds LNG rises, with the trend accelerated by Europe’s
the remaining 49% interest in the joint venture. scramble to wean itself off Russian pipeline gas
The Elba Island LNG facility is small in scale imports.
compared to the liquefaction megaprojects on “Recent geopolitical events have proven
the US Gulf Coast, with a capacity of 2.5mn how critical liquefied natural gas infrastruc-
tonnes per year (tpy) of the super-chilled fuel. ture is to meeting global energy demand,”
The ELC joint venture was formed in 2017 to stated Kinder Morgan’s interstate natural gas
build the facility, which is comprised of 10 mod- president, Kimberly Watson. “We believe this
ular liquefaction units. investment further shows the value of LNG and
Kinder Morgan, which will continue to oper- demonstrates the important role it will play for
ate the plant, said proceeds from the sale would decades to come.”™

P6 www. NEWSBASE .com Week 39 29•September•2022