Enbridge Acquires Shell's Gulf of Mexico Pipelines

Enbridge will acquire 100% of Shell Gas Transmission, LLC (SGT) from Shell US Gas & Power LLC for US$613 million, plus associated working capital. SGT has ownership interests in 11 transmission and gathering pipelines in five major pipeline corridors that currently move approximately 3 bcf/d and transport approximately half of all deepwater natural gas production in the Gulf of Mexico. Closing of the purchase is anticipated to occur by year-end, subject to receipt of regulatory approvals and customary closing conditions.

"The SGT acquisition is an excellent one for Enbridge," said Patrick D. Daniel, President & Chief Executive Officer of Enbridge. "It immediately establishes Enbridge as a major natural gas transporter in the Gulf - one of the key regions for continental supply growth and an area with significant potential for undiscovered natural gas reserves. It provides us with a new growth platform with good upside potential, and is financially and strategically attractive. The acquisition is consistent with our strategies of increasing our North American natural gas transmission assets, and of focusing on fee-based energy transportation and service infrastructure. We expect to fund the acquisition with existing liquidity and credit capacity, and we expect that it will be accretive to earnings by up to Cdn$0.14 per share in 2005."

"This acquisition puts Enbridge close to significant deepwater gas prospects and positions us to capture a large portion of this incremental deep Gulf supply," added Dan C. Tutcher, Enbridge Group Vice President, Transportation South. "We'll also be well situated to transport potential volumes from LNG re-gasification facilities proposed in the Gulf. Overall, with their broad geographic footprint and proximity to recent discoveries and new exploratory plays, we anticipate these pipelines will continue to deliver solid performance and offer tremendous opportunities for organic growth. We're fortunate to be adding members of SGT's high-quality management team and staff to our Houston-based team, so that the commercial and operational oversight of these systems continues to bring Enbridge and its customers the value, reliability and growth anticipated."

The systems included in this transaction have a combined landed capacity of approximately 4.7 bcf/d and comprise approximately 1,482 miles (2380 kilometers) of pipeline. The SGT system includes ownership in:

-- five natural gas transmission systems regulated by the Federal Energy Regulatory Commission and located in the Louisiana and Mississippi offshore waters of the Gulf of Mexico: these transmission systems include SGT's ownership interests in the Stingray (50%), Garden Banks (80%), Nautilus (50%), Mississippi Canyon (100%) and Destin (33 1/3%) pipelines; and

-- six connected deepwater gathering systems including new lines and extensions currently under construction and scheduled to be in service in 2005 and 2006: these gathering systems are supported by dedicated reserves under existing life-of-lease contracts with major oil companies and large independent producers.

Enbridge will assume SGT's role as commercial manager and field operator for most of the pipeline systems.

Commenting on the sale, Shell Gas & Power's Director for the Americas and Africa, Catherine Tanna said: "This sale is part of an on-going program of portfolio rationalization by Shell. It enables us to focus on our core upstream activities in the Gulf of Mexico."

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