Enbridge, based in Calgary, Alberta, and Houston-based Marathon Petroleum, a key partner in Sandpiper, are forming a joint venture to buy a stake in the Bakken Pipeline project, which would transport oil from North Dakota across the Midwest to Texas.
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Through the agreement, Enbridge would indirectly hold 75 percent of the joint venture’s 49 percent interest, or a 27.6 percent interest in the system. The remaining 25% of each of Dakota Access and ETCO is owned by wholly-owned subsidiaries of Phillips 66. At the time, the Sandpiper was expected to be in operation in early 2016, but regulatory delays in Minnesota have prevented construction from starting. At closing, Energy Transfer will get US$1.2 billion in cash while Sunoco will receive the other US$800 million.
Proceeds from the sale will be used by Energy Transfer and Sunoco Logistics to reduce debt and fund growth projects. The 30-inch diameter and 1,172 miles Dakota Access pipeline will carry crude oil from North Dakota to IL, while the second pipeline, Energy Transfer Crude Oil pipeline will carry converted crude oil from Patoka to Texas.
“This acquisition is an attractive opportunity to participate in a pipeline system that will transport crude oil from the prolific Bakken formation in North Dakota” to refineries in the Gulf of Mexico, Enbridge president Mark Maki said in a statement.
The sellers are an affiliate of Energy Transfer Partners and Sunoco Logistics Partners LP.
Energy Transfer, however, may face some hurdles in buying land from owners in Iowa along the Dakota Access route on to IL. Under the terms of an open season, Marathon Petroleum also expects its subsidiary to become a committed shipper on the Bakken Pipeline system. Both projects are expected to be complete later this year.
Enbridge Partners owns and operates a diversified portfolio of crude oil and, through its interests in Midcoast Energy Partners, L.P. (“Midcoast Partners”), natural gas transportation systems in the United States. In total, ETP now owns and operates more than 62,500 miles of natural gas and natural gas liquids pipelines.
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Enbridge Management, L.L.C. manages the business and affairs of Enbridge Energy Partners, L.P. (“Enbridge Partners”) (NYSE: EEP), and its sole asset is an approximate 16 percent limited partner interest in Enbridge Partners. For more information, visit the Sunoco Logistics Partners L.P. website at www.sunocologistics.com. An extensive list of factors that can affect future results are discussed in the Partnerships’ Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission.
