Enbridge inks deal with natural gas giant Encana
Enbridge Inc. President and CEO Patrick Daniel speaks at the company's annual general meeting in Toronto on Wednesday, May 9, 2012. (THE CANADIAN PRESS / Nathan Denette)
Published Monday, October 22, 2012 2:29PM EDT
CALGARY -- Pipeline operator Enbridge Inc. is buying assets from natural gas giant Encana Corp. in northwestern Alberta as it looks to grow its presence in the natural gas gathering and compression business.
The facilities that Enbridge (TSX:ENB) will acquire in Monday's announcement are in the Peace River Arch region and are either in service or under construction. The deal is expected to close in December.
Enbridge didn't give a pricetag for the deal, but said the financial terms will "parallel" previously established terms between Enbridge and Encana (TSX:ECA) reached in 2011.
Once the facilities are complete in 2013, Enbridge expects to have spent $264 million in the Peace River Arch.
Enbridge said it and Encana are also working together on more big midstream facilities in the natural gas-rich area.
"This agreement in the Peace River Arch region represents another step in the execution of our strategy to establish a strong position in the Canadian midstream business," said Leon Zupan, Enbridge's president of gas pipelines.
In northeastern B.C., where Enbridge is joint owner of the Cabin gas plant, the partners announced Monday they plan to defer the commissioning of the project's first phase and construction of its second phase.
Enbridge has a 71 per cent stake in the Cabin Gas Plant, which it acquired from Encana and other partners last year.
"The investment extends our footprint to the Peace River Arch region, which is expected to grow significantly in the years to come, under the same attractive commercial underpinning and return as our original Cabin investment," Zupan said, noting the Peace River area is close to the Alliance Pipeline.
"We are pleased to be extending our relationship with Encana and look forward to working with producers and all stakeholders in this region."