Wednesday, July 22, 2009

Enbridge to help Enbridge Energy Partners finance Alberta Clipper pipeline

CALGARY - The Alberta Clipper crude oil pipeline from Canada’s oil sands to Superior, Wis., will be funded primarily by Calgary-based Enbridge Inc. after the pipeline operator and natural gas distributor completed a restructuring deal for the project with its affiliate Enbridge Energy Partners.
The deal announced July 20 has Enbridge financing two-thirds of the $1.2 billion U.S. segment of the pipeline.
Enbridge is already funding the $2.4 billion Canadian portion of the pipeline now under construction.
Terrance McGill, president of Houston-based Enbridge Energy Partners, said the deal was necessary after equity markets "crashed and burned" last fall.
"Under normal circumstances we would prefer that EEP funds projects on its own in the public and private capital markets," McGill told a conference call on July 20. "However, over the last year or so it has become clear that EEP cannot fund the entire Alberta Clipper project effectively in a fashion that is beneficial to existing unitholders."
McGill said the deal with Enbridge reduces the partnership's need to raise equity so that it can now likely handle its commitment by selling non-strategic assets or a conventional placement of partnership units. He also said the agreement should "materially address the financing uncertainty" that has been a drag on unit prices.

No comments:

Post a Comment