[Context: On May 9, ArcLight Capital, which controls American Midstream (NYSE: AMID), announced plans to acquire Midcoast Operating, a Texas, Oklahoma and Louisiana midstream operator, for $1.12bn from Enbridge (TSX: ENB) (NYSE: ENB). Further details, advisors and related links are below.]


ArcLight Capital

Enbridge Announces US$1.120 Billion Sale of U.S. Midstream Businesses

CALGARY, May 9, 2018 /PRNewswire/ – Enbridge Inc. (TSX: ENB) (NYSE: ENB) (Enbridge or the Company) today announced its indirect subsidiary, Enbridge (U.S.) Inc., has entered into a definitive agreement to sell Midcoast Operating, L.P. and its subsidiaries (Midcoast), which conducts the Company’s U.S. natural gas and natural gas liquids (NGL) gathering, processing, transportation and marketing businesses, serving established basins in Texas, Oklahoma and Louisiana, to AL Midcoast Holdings, LLC (AL Midcoast) (an affiliate of ArcLight Capital Partners, LLC) for a cash purchase price of US$1.120 billion, subject to customary closing adjustments. The transaction is expected to close in the third quarter of 2018, subject to receipt of customary regulatory approvals and satisfaction of other customary closing conditions.

“The sale of Midcoast is an important step in our shift towards a pure regulated pipeline and utility model, and positions us well to achieve our goal of selling CAD$3 billion in non-core assets in 2018,” said Al Monaco, President and Chief Executive Officer of Enbridge. “This transaction includes our 100-percent-owned gathering and processing assets in Texas and Oklahoma. Proceeds from the sale will be used to accelerate the strengthening of our balance sheet and enhance the financial flexibility to fund our industry leading CAD$22 billion secured growth program.”

The Midcoast businesses include (i) natural gas gathering, treating, processing and transportation, and NGL transportation, assets located in the East Texas, Western Anadarko, and Barnett shale plays and consist of approximately 11,200 miles of natural gas gathering and transportation pipelines, 2,075 million cubic feet per day (MMcf/d) of natural gas processing capacity, and 1,330 MMcf/d of treating capacity, (ii) a NGL logistics and marketing business (including ELTM, L.P. and Enbridge Marketing (U.S.) L.P.), and (iii) a 35 percent interest in Texas Express Pipeline, consisting of a 594-mile, 20-inch NGL pipeline, and a 35 percent interest in Texas Express Gathering, consisting of 115 miles of NGL pipelines and other NGL infrastructure comprising the Company’s Texas Express NGL pipeline system.

“I’d like to thank our colleagues at Midcoast who have done an exceptional job running the business safely and reliably day-in and day-out. This sale places great people and great assets in a strong position for future growth,” added Mr. Monaco.

AL Midcoast intends to maintain Midcoast’s workforce and anticipates that they will join AL Midcoast upon transaction close. AL Midcoast intends to retain a Houston presence.

Enbridge will work with AL Midcoast to ensure a safe transition of Midcoast’s operations.

Citi acted as financial advisor and Norton Rose Fulbright US LLP acted as legal advisor to Enbridge on the transaction.

About Enbridge Inc.
Enbridge Inc. is North America’s premier energy infrastructure company with strategic business platforms that include an extensive network of crude oil, liquids and natural gas pipelines, regulated natural gas distribution utilities and renewable power generation. The Company safely delivers an average of 2.8 million barrels of crude oil each day through its Mainline and Express Pipeline; accounts for approximately 65% of U.S.-bound Canadian crude oil exports; and moves approximately 20% of all natural gas consumed in the U.S., serving key supply basins and demand markets. The Company’s regulated utilities serve approximately 3.7 million retail customers in Ontario, Quebec, and New Brunswick. Enbridge also has interests in more than 2,500 MW of net renewable generating capacity in North America and Europe. The Company has ranked on the Global 100 Most Sustainable Corporations index for the past nine years; its common shares trade on the Toronto and New York stock exchanges under the symbol ENB.

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