Caisse de depot buys $850 million stake in pipeline

Caisse headqarters in Montreal

MONTREAL - Pension fund manager Caisse de depot et placement du Quebec said Wednesday that it's buying a 16.55-per cent interest in a U.S. oil pipeline for US$850 million.

The Caisse said it will acquire Colonial Pipeline Company and Colonial Ventures LLC from ConocoPhillips (NYSE:COP).

The Colonial Pipeline is considered the largest refined petroleum products pipeline in the United States.

"The Caisse is always interested in quality assets that yield stable, long-term returns," said Normand Provost, executive vice-president of private equity and chief operations officer.

"This particular investment targets an infrastructure project in a regulated industry that we know well through our investments in Gaz Metro, Interconnector, Enbridge and Fluxys," he said in a news release.

The Caisse said it expects to close the transaction in the first quarter of 2012.

The transaction is part of a larger sale of oil and gas assets by ConocoPhillips on Wednesday designed to focus the company on its most profitable businesses.

ConocoPhillips also sold its 50 per cent stake in the Seaway crude pipeline between Oklahoma and Texas to Calgary-based Enbridge Inc. (TSX:ENB) for $1.15 billion.