Enbridge is set to become the largest gas supplier in the US with a $14 billion bid to buy Dominion’s facilities

The logo of Calgary-based Enbridge Corporation, one of North America’s largest energy infrastructure companies, is displayed during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, on July 12, 2023. REUTERS/Chris Helgren acquire licensing rights

Sep. 5 (Reuters) – Enbridge (ENB.TO) said on Tuesday it will buy three facilities from Dominion Energy (DN) for $14 billion including debt, creating the largest provider of natural gas in North America and doubling its gas distribution business.

The deal is seen as a bet on the future of natural gas in a regulated market, even as energy companies and consumers move to a greener future by phasing out fossil fuels.

The deals for East Ohio Gas and Questar Gas and Public Service of North Carolina will consist of $9.4 billion in cash and $4.6 billion in assumed debt.

US-listed Enbridge shares fell 6.5% to $33.01 in extended trading after the company also announced a C$4 billion ($2.9 billion) worth of purchased shares to fund part of the deal.

The divestment is the latest Dominion has undertaken following a strategic update announced last year aimed at focusing on its regulated operations. In July, Dominion agreed to sell its 50% stake in Cove Point LNG to the energy arm of Berkshire Hathaway (BRKa.N) for $3.3 billion.

Enbridge President and CEO Greg Epple described the assets the company is acquiring as infrastructure that is “essential” to providing safe, reliable and affordable energy.

The deal is expected to close in 2024, subject to approvals by the Federal Trade Commission and the Committee on Foreign Investment in the United States, among others.

At closing, Enbridge will supply more than 9 billion cubic feet per day of gas to approximately 7 million customers in Ohio, North Carolina, Utah, Idaho and Wyoming, making it the largest gas utility company by volume in North America.

It would give the Calgary-based company access to more cash from American consumers when they buy gas for cooking and heating from an Enbridge-owned utility.

“Enbridge is currently the only major pipeline company and intermediary company with regulated gas facilities, and we have strengthened that position today by doubling the size of our gas distribution and storage business,” Enbridge Chief Financial Officer Patrick Murray said in a statement. a permit.

Utilities in the US have focused on their regulated operations because they provide the fixed returns that investors prefer, compared to unregulated assets whose returns are dictated by market dynamics.

Morgan Stanley & Co LLC and RBC Capital Markets acted as financial advisors to Enbridge, while Sullivan & Cromwell LLP and McCarthy T├ętrault LLP acted as legal advisors.

($1 = 1.3636 Canadian dollars)

(Reporting by Arunima Kumar in Bengaluru and David French in New York; Reporting by Mohamed for The Arabic Bulletin) Editing by Shailesh Cooper, Sriraj Kaluvella and Richard Chang

Our Standards: The Thomson Reuters Trust Principles.

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