Enbridge Income Fund acquires natural gas and diluent pipeline stakes for $1.76bn

Enbridge Income Fund Holdings and Enbridge Income Fund have acquired a 50% stake in the US segment of the Alliance Pipeline in a $1.76bn transaction.

The transaction also included the purchase of Class A Units which provide a defined cash flow stream from the Southern Lights Pipeline by indirect subsidiaries of Enbridge Income Fund from indirect subsidiaries of Enbridge.

The Alliance Pipeline system features a 3,719km Canadian and US natural gas transmission pipeline system.

It supplies natural gas from the Western Canadian Sedimentary Basin and the Williston Basin to the Chicago market hub.

The US portion of the system features about 900 miles of mainline and related infrastructure.

The system, which began services in December 2000, supplies around 1.6 billion standard cubic feet of natural gas per day.

The Southern Lights diluent delivery system carries product via 2,556km of pipeline starting near Chicago and terminating in Edmonton, Alberta.

It also included the LSr Project, a 504km crude oil pipeline from Cromer, Manitoba to Clearbrook, Minnesota.

Enbridge Income Fund Holdings president Perry Schuldhaus said: "We are very pleased to close this transaction and add these desirable assets to our portfolio.

"These assets are supported by strong fundamentals and commercial terms, and are ideally suited for our low-risk business model. They bolster and diversify the Fund’s future cash flow and generate healthy accretion which supports an immediate 12.1 percent increase in the dividend."