Enbridge, an energy transportation and distribution company from Canada, has sold one of its key assets, the South East Saskatchewan pipeline system, including 1600 km of crude oil pipelines, to Tundra Energy, a private infrastructure company, for $1.08 billion.
Enbridge will apply the proceeds toward the purchase of U.S. Spectra Energy, a $28 billion deal creating the largest energy infrastructure company in North America. When the deal is closed, Enbridge shareholders will own 57 percent of the company, while Spectra holders will have the remaining 43 percent.
"“In conjunction with the proposed Spectra Energy merger, we announced our intention to divest of approximately $2 billion of non-core assets over the next year to further strengthen Enbridge Inc.’s consolidated balance sheet and provide for additional financing flexibility,” Enbridge chief financial officer John Whelen said in a news release on Thursday."
The company is expected to complete the transaction with Spectra in early 2017.