Enbridge To Pay $14 Billion For Three U.S. Natural Gas Utilities

Enbridge has struck a deal with Dominion Energy to buy three natural gas utilities from it for a total consideration of $14 billion.

The net value of the deal is $9.4 billion but will also involve the assumption of the utilities’ debt.

The pipeline operator said in a statement that the acquisition would create the largest natural gas franchise in North America, with the capacity to deliver 9.3 billion cubic meters per day to customers in Ohio, Utah, Wyoming, Idaho, and North Carolina.

“Adding natural gas utilities of this scale and quality, at a historically attractive multiple, is a once-in-a-generation opportunity. The transaction also reinforces our position as the first-choice energy delivery company in North America,” said Enbidge chief executive Greg Ebel.

The seller, meanwhile, will focus on the regulated electricity market, the Financial Times reported, citing Dominion’s chief executive.

“Data centre expansion, bolstered by artificial intelligence . . . along with electrification, and general economic activity are driving the most significant demand growth in our company’s history and shows no signs of abating,” Robert Blue said.

The deal appears to be part of a trend among major pipeline operators in North America to focus increasingly on natural gas, despite the Biden administration’s and some states’ attempts to curb the consumption of the cleanest hydrocarbon.

In July, Enbridge peer TC Energy said it would spin off its oil and liquid fuel pipeline business to focus on gas. After the split, the company said, “the new TC Energy would be a “diversified, industry-leading natural gas and energy solutions company, uniquely positioned to meet growing industry and consumer demand for reliable, lower-carbon energy, by leveraging complementary business sets.”

Meanwhile, Enbridge’s Ebel noted that “The assets we are acquiring have long, useful lives—and natural gas utilities are ‘must-have’ infrastructure for providing safe, reliable and affordable energy.”

By Charles Kennedy for Oilprice.com

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