UPDATE 1-Enbridge to buy some gas facilities from Encana
Oct 22 (Reuters) - Enbridge Inc, Canada's second-largest pipeline company, said it will buy some gas facilities from Encana Corp in the Peace River Arch region in northwestern Alberta to strengthen its natural gas gathering and compression business.
Enbridge, whose pipelines carry the bulk of Canada's oil exports to the United States, said its total investment in the region is expected to be about C$264 million ($266 million) after construction of all the facilities is completed in 2013.
Enbridge has been looking to strengthen its Canadian gas gathering and compression business, while Encana, Canada's biggest gas producer, has been shifting to more profitable oil and liquids-rich gas production. Dry gas prices are under pressure due to an oversupply of the fuel in North America.
"This agreement in the Peace River Arch region represents another step in the execution of our strategy to establish a strong position in the Canadian midstream business," said Leon Zupan, president of Enbridge's gas pipelines unit.
Enbridge faced fresh political opposition to its C$6 billion Northern Gateway pipeline on Monday, when British Columbia Premier Christy Clark was reported as saying that any move by the federal government to push through the controversial project would lead to national political crisis.
The Northern Gateway is a proposed 525,000 barrel-a-day line that would transport crude from Alberta's oil sands to Kitimat on British Columbia's Northwest coast for shipment to Asia.
Enbridge shares fell more than 1 percent to C$39.05 on the Toronto Stock Exchange, while Encana shares fell 5 percent to C$22.56 as Canada's rejection of a foreign bid for Progress Energy Resources Corp rippled through energy stocks.