Enbridge has agreed to sell its natural gas distribution business in New Brunswick (NB), Canada to Liberty Utilities (Canada), a subsidiary of Algonquin Power and Utilities (APUC) for CAD$331m ($249m).
The business to be sold, called Enbridge Gas New Brunswick (New Brunswick Gas), is a regulated utility that distributes natural gas to nearly 12,000 customers in 12 communities in the Canadian state. The company also operates and maintains more than 1,200km of natural gas distribution pipeline in southern New Brunswick.
According to APUC CEO Ian Robertson, the acquisition of New Brunswick Gas adds a new, high-quality utility to Liberty Utilities’ East Region while being immediately accretive to the overall group’s earnings.
Robertson said: “As a proudly Canadian company, we see New Brunswick Gas as an ideal opportunity to expand the distribution footprint into Canada, where we see tremendous potential to invest in growing the customer base.
“We look forward to welcoming the New Brunswick Gas team to the APUC family, and are committed to supporting the dedicated teams as they continue to deliver the same great services across the province.”
Customers of New Brunswick Gas or the rates paid for service are not expected to be impacted by the transaction. APUC said that it plans to maintain local employment and the existing local operating and management structure after closing of the deal.
Enbridge utilities and power operations executive vice president Cynthia Hansen said: “This is a great franchise with a complement of dedicated and hard-working employees. The sale aligns with Enbridge’s priority of focusing on expanding and growing its business in core markets.
“Enbridge will work with Liberty Utilities to ensure a safe and orderly transition of business’ operations.”
The Canadian natural gas distribution company said that it will maintain its stake in the Maritimes and Northeast Pipeline, which serves markets across Atlantic Canada, including New Brunswick, and the northeastern US.
The sale of New Brunswick Gas, which will be subject to regulatory approvals and other customary closing conditions, is likely to be completed in 2019.
In early August, Enbridge sold its US midstream assets and monetized a part of its renewables business for a total of around C$3.15bn ($2.4bn).