Enbridge Inc. is reviewing a potential restructuring plan that would involve the transfer of its directly held U.S. liquids pipeline assets to Enbridge Energy Partners LP (EEP), a U.S. affiliate of Enbridge.
"Enbridge's recent restructuring announcement is a clear message that Enbridge is seriously considering further drop-down transactions to EEP. Enbridge's U.S. liquids pipeline systems are extensive and include very strategic assets such as the Flanagan South, Spearhead, Seaway, Toledo and Southern Access Extension pipelines. In addition, EEP and Enbridge have jointly funded several major expansions of the Lakehead pipeline system in the Great Lakes region of the U.S., said Mark A. Maki, president of Enbridge Management.
Maki noted that the company’s U.S. pipeline systems are largely underpinned by low-risk commercial frameworks, such as cost of service or ship-or-pay commitments.
"The potential dropdown of Enbridge's U.S. liquids pipelines systems would add substantial new sources of long-lived and growing cash flows to EEP's already exceptional portfolio of liquids pipeline systems. The restructuring plan under consideration by Enbridge once again demonstrates the strategic alignment and support of our sponsor Enbridge, and its commitment to enhancing the value of EEP for all of our investors," concluded Maki.
An independent committee of the board is currently reviewing and considering the terms of the previously announced proposed transfer to EEP of Enbridge's 67% interest in the U.S. segment of the Alberta Clipper Pipeline, which, if approved, is expected to be completed by year end.
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