Enbridge defers Sandpiper Project
Enbridge Inc.’s affiliate Enbridge Energy Partners ("EEP") will withdraw regulatory applications pending with the Minnesota Public Utilities Commission for the Sandpiper Pipeline project ("Sandpiper"). EEP has completed a review of Sandpiper and concluded that the project should be delayed until such time as crude oil production in North Dakota recovers sufficiently to support the development of new pipeline capacity. Based on updated projections, EEP believes that new pipeline capacity will not likely be needed until beyond the company's five-year planning horizon.
Enbridge and an independent special committee of the board of directors of the delegate of EEP's general partner have also reached a tentative agreement on the terms of an arrangement through which each party would fund the acquisition of and participate in the returns generated by an effective 27.6% interest in the Bakken Pipeline System ("Bakken pipeline"), a transaction previously announced August 2, 2016. It is anticipated that the investment in the Bakken pipeline will be jointly funded 75% by Enbridge, through Enbridge Energy Company Inc. and 25% by EEP.
Given recent funding actions and the plan to defer the Sandpiper project beyond the Company's 5 year planning horizon, the investment in the Bakken Pipeline system is not expected to generate an incremental requirement for equity capital at Enbridge over and above amounts indicated in the company's previously communicated consolidated funding plan for the years 2015 through 2019.
The interest in the Bakken Pipeline will be acquired through an indirect investment in a joint venture with Marathon Petroleum. The joint venture will own a 49% interest in an affiliate of Energy Transfer Partners LP and Sunoco Logistics Partners LP which in turn owns 75% of the system. The closing of the Bakken Pipeline acquisition is anticipated to occur around the end of the third quarter of 2016.
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