By mid-February it was all over but the lawyers as far as efforts to delay construction of the Dakota Access Pipeline (DAPL). President Trump’s directive to the U.S. Army Corps of Engineers was to expedite the easement and allow construction of the final segment of the 1,172-mile pipeline in North Dakota.
Sure, environmental activist organizations continued to sue, but events allowed the financial pieces of the project which, along with the Energy Transfer Crude Oil Pipeline, is known as the Bakken Pipeline System, to move forward. Specifically:
--Financing—Energy Transfer Partners LP and Sunoco Logistics Partners LP completed about $3.4 billion of com¬mitted debt and equity transactions, including financing for the system.
--Partner—MPLX LP closed on its previously announced transaction to acquire a 36.75% indirect equity interest in the Bakken Pipeline System from Energy Transfer Partners and Sunoco Logistics. The $2 billion deal, through a joint venture (JV) with Enbridge Energy Partners LP, entails MPLX con¬tributing $500 million. MPLX holds, through a subsidiary, a 25% interest in the JV, which equates to an approximate 9.2% indirect equity interest in the Bakken Pipeline System.
--Deal complete—Enbridge Inc. and Enbridge Energy Partners LP (EEP) completed their transaction to acquire an effective 27.6% interest in the system.
The system connects the Bakken Shale formation in North Dakota to eastern PADD II and the U.S. Gulf Coast. Construction was about 95% complete as March began.
“The project is expected to provide attractive risk-adjusted returns and is underpinned by a significant level of take-or-pay contracts with high credit quality counterparties,” said Guy Jarvis, Enbridge president, liquids pipelines and major projects, in a statement. “It is expected to be immediately accretive to earnings and ACFFO [adjusted cash flow from operations] per share, and we’re pleased to be moving forward with this project.”
Jarvis added that the company anticipates the potential for future low-cost expansions in the system.
In the short term, Enbridge will fund the deal with a $1.5 billion bridge loan to EEP through a subsidiary. The loan will remain in place until a joint funding arrangement with the MLP is finalized, likely during the second quarter. Ultimately, Enbridge could fund up to 75% of the deal, which the company said has been factored into its financing plans.
Joseph Markman can be reached at jmarkman@hartenergy.com or 713-260-5208.
Recommended Reading
Triangle Energy, JV Set to Drill in North Perth Basin
2024-04-18 - The Booth-1 prospect is planned to be the first well in the joint venture’s —Triangle Energy, Strike Energy and New Zealand Oil and Gas — upcoming drilling campaign.
TotalEnergies Cements Oman Partnership with Marsa LNG Project
2024-04-22 - Marsa LNG is expected to start production by first quarter 2028 with TotalEnergies holding 80% interest in the project and Oman National Oil Co. holding 20%.
TotalEnergies to Acquire Remaining 50% of SapuraOMV
2024-04-22 - TotalEnergies is acquiring the remaining 50% interest of upstream gas operator SapuraOMV, bringing the French company's tab to more than $1.4 billion.
EIG’s MidOcean Closes Purchase of 20% Stake in Peru LNG
2024-04-23 - MidOcean Energy’s deal for SK Earthon’s Peru LNG follows a March deal to purchase Tokyo Gas’ LNG interests in Australia.
Phoenix Capital Group Acquires Uinta Basin Royalty Interests
2024-04-29 - Phoenix Capital Group’s acquisition of 1,500 net royalty acres in Duchesne County, Utah, brings the company's investment in the Uinta Basin to more than $60 million, the company said.