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Enbridge acquires Bakken stake

Published by , Assistant Editor
World Pipelines,

According to Enbridge Energy Partners, L.P. (EEP), the transaction to acquire an effective 27.6% interest in the Bakken pipeline system has closed as final conditions have now been met.

The system consists of the Dakota Access pipeline (DAPL) and the Energy Transfer Crude Oil pipeline, both of which will be operated by Energy Transfer Partners, L.P.

The system connects the Bakken formation in North Dakota to the US Midwest and the Gulf Coast. Construction of the Bakken pipeline is advanced and approximately 95% complete.

EEP will initially fund its US$1.5 billion acquisition through a bridge loan provided by an affiliate of Enbridge Inc. This bridge loan will remain in place until a joint funding arrangement with Enbridge and its affiliates is finalised. Joint funding terms are expected to be completed during 2Q17 as part of the ongoing strategic review underway at EEP.

While the terms of the joint funding arrangement are yet to be finalised, EEP's initial investment has typically been in the order of 25% for prior joint funding arrangements.

"We're pleased with the opportunity to add this investment to the EEP liquids pipeline portfolio," said Mark Maki, President for EEP. "The project is expected to provide attractive risk-adjusted returns and is underpinned by a significant level of take-or-pay contracts with high credit quality counterparties. In addition, the investment offers the potential for future low-cost expansions."

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