CALGARY, Alberta, Sept 29 Tundra Energy
Marketing Ltd, a privately-held Canadian energy infrastructure
company, said on Thursday it has agreed to buy a regional
pipeline system from an affiliate of Enbridge Income Fund
for C$1.075 billion ($818.11 million).
The South East Saskatchewan system includes more than 1,600
kilometres (994 miles) of crude oil and liquids gathering
pipelines, 547 kilometres of "trunk line" that feeds into the
Enbridge Mainline system and four truck terminals.
Enbridge's Mainline is the main conduit for Canadian crude
barrels being shipped south to U.S. markets. The SE Saskatchewan
system currently transports 175,000 barrels per day of crude to
the Mainline at Cromer, Manitoba, a major hub for barrels in
Canada's southern prairies region.
Once the transaction, which is expected to close in late
2016, subject to regulatory approvals, is completed Tundra will
handle more than 250,000 barrels per day of crude production
from Saskatchewan, Manitoba and North Dakota.
The company will also have more than 600,000 barrels of
crude storage capacity and oil-by-rail loading facilities in
"We know and understand this part of the world, the
Saskatchewan portion of which is one of the most-economic oil
production areas in North America," said Bryan Lankester,
president of Tundra.
All Enbridge employees currently working on the SE
Saskatchewan system are expected to join Tundra once the deal is
closed. Meanwhile, agreements with existing oil shippers are
expected to remain in place.
Enbridge Income Fund President Perry Schuldhaus said the
system was a non-core asset and that proceeds from the sale
would be reinvested in the fund's $9 billion portfolio and help
meet its 2017 equity capital requirements.
($1 = 1.3140 Canadian dollars)
(Reporting by Nia Williams; Editing by Alan Crosby)