Tundra Energy Marketing Ltd. (TEML) has recently announced that it has come to an agreement with Enbridge Income Fund (Enbridge) for the purchase the south-east Saskatchewan pipeline system. The agreement is expected to close in late 2016, subject to various regulatory approvals.
The Saskatchewan pipeline system includes over 1600 km of crude oil and liquids gathering pipelines, approximately 547 km of trunk line and four truck terminals.
At present, the system transports approximately 175 000 bpd of crude oil to Enbridge's mainline system at Cromer, Manitoba. However, following the close of this transaction, TEML is expected to handle over 250 000 bpd of crude oil production from Saskatchewan, Manitoba and North Dakota. It will also continue to have over 600 000 bbls of crude oil storage capacity and the ability to load unit at Cromer, Manitoba.
All Enbridge employees that are currently working on the Saskatchewan system are expected to keep their jobs but join TEML following closing of the transaction.
Bryan Lankester, President of TEML stated: "TEML and its affiliated companies have operated for over 35 years in the Williston Basin. We know and understand this part of the world, the Saskatchewan portion of which is one of the most economic oil production areas in North America. The acquisition of this well cared for asset is very complementary to TEML's existing portfolio of midstream infrastructure."
Bloomberg noted that Enbridge is selling the pipeline network following its takeover of Spectra Energy. The sale will help the company’s income fund finance its growth programme, said Chief Financial Officer, John Whelen in a statement from Enbridge.
Enbridge Income Fund’s President, Perry Schuldhaus, is reported by Reuters to have said that the system was a non-core asset and proceeds from the sale would be reinvested in the fund's US$9 billion portfolio to help meet its 2017 equity capital requirements.
Read the article online at: https://www.worldpipelines.com/business-news/30092016/tundra-energy-to-buy-enbridge-pipeline-system/