CALGARY, AB,
Aug. 17, 2022 /CNW/
- Enbridge Inc. (Enbridge or the Company) (TSX: ENB) (NYSE:
ENB) today announced it has completed a joint venture merger
transaction with Phillips 66 (P66) resulting in a single joint
venture holding both Enbridge's and P66's indirect ownership
interests in Gray Oak Pipeline, LLC (Gray Oak) and DCP Midstream LP
(DCP) and an agreement to realign their respective economic and
governance interests in the underlying business operations.
Through the surviving joint venture as illustrated below,
Enbridge will increase its indirect economic interest in Gray Oak
to 58.5% from 22.8%, and the parties have agreed to transfer to
Enbridge, from P66, the operatorship of Gray Oak, the long-haul,
contracted pipeline which provides critical, low-cost connectivity
from the Permian into Corpus
Christi and the Houston
area. The transfer of operatorship of Gray Oak is planned to occur
in the second quarter of 2023. In turn, Enbridge will reduce its
indirect economic interest in DCP to 13.2% from 28.3%, further
reducing its commodity price exposure and strengthening the
Company's low risk pipeline-utility model.
The merger is expected to be immediately accretive to Enbridge's
distributable cash flow per share and result in an approximately
US$400 million cash payment to the
Company from the merged entity. The cash generated from the
transaction will create additional financial flexibility and
further the Company's capital allocation priorities.
"We're pleased to have reached this new arrangement with P66 to
optimize the combined assets and drive operational and financial
synergies from both assets," said Al
Monaco, President and Chief Executive Officer of Enbridge.
"It's another example of our continued focus on optimizing our
portfolio and surfacing value for our shareholders, while further
building out our already strong U.S. Gulf Coast export position. We
look forward to continuing our strong partnership with P66."
Gray Oak Pipeline, in combination with Enbridge's Ingleside
Energy Center (EIEC), provides an industry-leading solution to
deliver low-cost, long-lived Permian Basin oil to local Gulf Coast
and global export markets. The EIEC currently loads nearly 30% of
North American oil exports. Through 2030, the Company anticipates
that Permian oil supply will grow by an estimated two million
barrels per day, enhancing Gray Oak's utilization and driving
increased oil exports off the Gulf Coast. Further integration of
Gray Oak and the EIEC is expected to support the development of new
commercial solutions and future growth potential, unlocking
additional value for Enbridge's customers.
Enbridge intends to extend its solar self-power strategy by
working with the other Gray Oak owners to develop solar facilities
along the Gray Oak right-of-way in support of the Company's
net-zero emissions targets, and those of its customers'.
Citi acted as financial advisor to Enbridge and Vinson &
Elkins acted as its legal counsel.
Forward-Looking Information
Forward-looking information, or forward-looking statements,
have been included in this news release to provide information
about Enbridge and its subsidiaries and affiliates, including
management's assessment of Enbridge and its subsidiaries' and
affiliates' future plans and operations. This information may not
be appropriate for other purposes. Forward looking statements are
typically identified by words such as ''anticipate'', ''expect'',
''project'', 'estimate'', ''forecast'', ''plan'', ''intend'',
''target'', ''believe'', "likely" and similar words suggesting
future outcomes or statements regarding an outlook. Forward-looking
information or statements included or incorporated by reference in
this document include, but are not limited to, statements with
respect to the joint venture merger transaction with Phillips 66
(the "Transaction") and related matters, including expected
accretion, operational and financial synergies, and other benefits
of the Transaction; expected Permian oil supply; expected Gulf
Coast oil exports; expected utilization of Gray Oak; integration of
Gray Oak and Enbridge Ingleside Energy Center; future growth
opportunities; solar self-power strategy; and net zero emissions
targets.
Although Enbridge believes these forward-looking statements
are reasonable based on the information available on the date such
statements are made and processes used to prepare the information,
such statements are not guarantees of future performance and
readers are cautioned against placing undue reliance on
forward-looking statements. By their nature, these statements
involve a variety of assumptions, known and unknown risks and
uncertainties and other factors, which may cause actual results,
levels of activity and achievements to differ materially from those
expressed or implied by such statements. Material assumptions
include assumptions about the following: energy transition,
including the drivers and pace thereof; the COVID-19 pandemic and
the duration and impact thereof; global economic growth and trade;
the expected supply of and demand for crude oil, natural gas,
natural gas liquids ("NGL"), liquified natural gas ("LNG") and
renewable energy; prices of crude oil, natural gas, NGL, LNG and
renewable energy; anticipated utilization of our assets;
anticipated cost savings; exchange rates; inflation; interest
rates; availability and price of labour and construction materials;
the stability of our supply chain; operational reliability and
performance; customer, regulatory and stakeholder support and
approvals; anticipated construction and in-service dates; weather;
announced and potential acquisition, disposition and other
corporate transactions and projects and the timing and impact
thereof, including the Transaction; expectations about our
partners' ability to complete and finance proposed transactions and
projects, including the Transaction; governmental legislation;
litigation; credit ratings; hedging program; expected EBITDA and
expected adjusted EBITDA; expected earnings/(loss) and adjusted
earnings/(loss); expected earnings/(loss) or adjusted
earnings/(loss) per share; expected future cash flows and expected
future distributable cash flow ("DCF") and DCF per share; estimated
future dividends; financial strength and flexibility; debt and
equity market conditions; and general economic and competitive
conditions. Assumptions regarding the expected supply of and demand
for crude oil, natural gas, NGL, LNG and renewable energy and the
prices of these commodities are material to and underlie all
forward-looking statements, as they may impact current and future
levels of demand for the Company's services. Similarly, exchange
rates, inflation, interest rates and the COVID-19 pandemic impact
the economies and business environments in which the Company
operates and may impact levels of demand for the Company's services
and cost of inputs and are, therefore, inherent in all
forward-looking statements. Due to the interdependencies and
correlation of these macroeconomic factors, the impact of any one
assumption on a forward-looking statement cannot be determined with
certainty, particularly with respect to expected DCF and DCF per
share amounts.
Enbridge's forward-looking statements are subject to risks
and uncertainties pertaining to the realization of anticipated
benefits and synergies of projects and transactions, including the
Transaction, successful execution of our strategic priorities,
operating performance, the Company's dividend policy, regulatory
parameters, changes in regulations applicable to the Company's
business, litigation, acquisitions and dispositions and other
transactions, project approval and support, renewals of
rights-of-way, weather, economic and competitive conditions, public
opinion, changes in tax laws and tax rates, changes in trade
agreements, political decisions, exchange rates, interest rates,
commodity prices, supply of and demand for commodities and the
COVID-19 pandemic, including but not limited to those risks and
uncertainties discussed in this and in the Company's other filings
with Canadian and U.S. securities regulators. The impact of any one
risk, uncertainty or factor on a particular forward-looking
statement is not determinable with certainty, as these are
interdependent, and Enbridge's future course of action depends on
management's assessment of all information available at the
relevant time. Except to the extent required by applicable law,
Enbridge assumes no obligation to publicly update or revise any
forward-looking statements made in this news release or otherwise,
whether as a result of new information, future events or otherwise.
All forward-looking statements, whether written or oral,
attributable to Enbridge or persons acting on the Company's behalf,
are expressly qualified in their entirety by these cautionary
statements.
About Enbridge
At Enbridge, we safely connect millions of people to the
energy they rely on every day, fueling quality of life through our
North American natural gas, oil or renewable power networks and our
growing European offshore wind portfolio. We're investing in modern
energy delivery infrastructure to sustain access to secure,
affordable energy and building on two decades of experience in
renewable energy to advance new technologies including wind and
solar power, hydrogen, renewable natural gas and carbon capture and
storage. We're committed to reducing the carbon footprint of the
energy we deliver, and to achieving net zero greenhouse gas
emissions by 2050.
Headquartered in Calgary,
Alberta, Enbridge's common shares trade under the symbol ENB
on the Toronto (TSX) and
New York (NYSE) stock exchanges.
To learn more, visit us at Enbridge.com.
For Further Information Please Contact:
Media
Toll Free: (888) 992-0997
Email: media@enbridge.com
Investment Community
Toll Free: (800) 481-2804
Email: investor.relations@enbridge.com
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SOURCE Enbridge Inc.