Canada's Tundra Energy to buy Enbridge regional pipeline system
CALGARY, Alberta, Sept 29 (Reuters) - 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 Cromer.
"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)
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